Op-ed: Cryptocurrency is Emerging as a Mainstream Asset Class
Any kind of tech would encounter its initial stages with disdain as well as criticism.
Much like the Kodak and Digital Camera revolution, Cryptocurrency also faced many obstacles among the traditional bankers/investors.
In recent times, Cryptocurrency has made its place as a mainstream asset class which originally had a mystery creator till its market-cap expanded exponentially.
Satoshi’s works and thoughts, excluding Satoshi Fire Alarm, could very well stand out in history as a modern-day Socrates.
Cryptocurrency’s road to Legitimacy
Most of the people by now have heard about cryptocurrency and to a certain extent/degree, it has also been accepted. Yet, there’s a lot to be decided over the regulation and governance.
It is, in fact, evident that traditional banking or investing or monetary policies are starting to jump towards crypto, maybe not completely as of yet. It is indeed a good asset class which has made an impact on the entire generation and hence could gain new customers accounts as well.
Equities in the markets were hit in a great way due to the housing crash which occurred a decade back. This has created an awareness among the millennial which tends to make them feel cautious about the crash’s sting on the families of those who lost homes as well as those who couldn’t retire at the right time.
In US, legitimacy is shown through reports, regulatory requirement and obviously on the security of the money as well. These needs are met by Coinbase.
Competition among firms could bring an exclusive-product-offering like mutual funds that would outperform the index, low fees on management, etc. Thus this would lead many institutional investment firms to produce their own in-house products for the many retail investors.
What about the precious metals?
Usually, it’s well known that the various precious metals especially gold is considered as an asset. But crypto, if accepted by all, could be a good alternative for gold itself as a safe haven. Here’s why-
- Payments would settle much faster which makes it easier for purchases since purchases can be done directly through phones, unlike gold.
- It provides as a multiple asset class since a single classification like security could ruin the basic use of Blockchain.
- It acts as savings, current as well as security type of an asset which makes it the first asset to have these many purposes.
- It could very well be a good substitute for gold since it already has the ‘fear gauge’ and it would not erode due to inflation; even though the prices are fluctuating, the ROR (Rate of Return) would be better.
Thus, it would reach its pure acceptance only during a time when the word ‘Bitcoins’ wouldn’t bring any emotional responses or grudges against it.
Hence, crypto could indeed emerge as a cash substitute soon if and when it is accepted among all the media, banks, investors, and the others.