Digital assets are financial instruments that are completely dependent on the internet. Among them are cryptocurrencies, NFTs, and tokenized securities. More and more investors see the high returns and diversification potential of these products and hence the demand has been tremendous. One clear indication of this is the market boom; the total capitalization of cryptocurrencies alone reached over $700 billion in 2020 and it increased to over $2 trillion in 2021, which is a clear signal that the interest is not going away soon.
One of the main contributors to the expansion of digital assets is the institutional investors. We are witnessing the changing attitude of the traditional finance players as major enterprises are now adding digital assets to their investment portfolios. Besides, the developments in technology coupled with the regulatory certainty have paved the way for the consumers to adopt digital assets in a wider scale. In fact, as the platforms keep improving by offering better security and easier interfaces, even the novice investors can become part of this captivating frontier pretty quickly.
Why Digital Assets Are Reshaping Global Finance
Digital assets lead the way in the financial revolution. Their introduction is a game changer allowing not only more but also faster transactions. Blockchain technology guarantees that every transaction is recorded immutably, therefore, diminishing the chances of fraud.
Cryptocurrency has been the main factor in opening the investment gates to all. The only requirement for being part of the market is not large sums of money anymore as micro-investing is already a practice. Another radical change initiated by DeFi platforms is the provision of banking services, including loans and borrowing, without having to deal with intermediaries. The traditional way of banking is losing control over the users and the latter are becoming more powerful financially. Besides, the digital assets have grabbed the attention of the global investors and regulators all at once. The Central Bank Digital Currencies (CBDCs) are one of the countries’ initiatives that might alter the global monetary policy landscape. The integration of digital assets into the daily financial transactions is only a matter of time as the industries to be adapted. The developed economy does not have to be a huge market; it can supply only the innovators and the ecosphere will remain inclusive to the rest of the world.
Digital assets are investors’ new elixirs, both institutional and retail. Interested institutions like hedge funds and pension funds see the opportunity to create a balanced portfolio with cryptocurrencies and blockchain technologies. The participation of these players raises the bar of the market’s reputation. In the opposite direction, retail investors have never been more comfortable with the access to the new tech-driven financial products. Nowadays, anybody can invest in digital currencies or tokens as there are very friendly platforms available for this purpose.
