How to Invest in Digital Assets

Some of the most significant investment opportunities have come in trading digital assets during the past few years. Many believe that those who commit are more likely to yield a profit in a relatively short time.

There’s no guaranteed way to see a positive return, but the surge in interest is noted by CNBC, who reported that 13% of Americans traded in cryptocurrency in 2021.

Growth of interest in crypto

As we’ve already touched upon, cryptocurrency has been a hot topic, and with good reason. If you look at the value of Bitcoin back at the end of 2019, the price hovered around $7,200. But as noted by Time Magazine, it ended 2021 with a value of approximately $68,000, which is an extraordinary increase of 844%. Although, it is worth noting that it is still a very volatile market, as highlighted during the last 12 months.

While things ended on an all-time high at the end of the summer, the currency suffered a 53% drop in value halfway through the year before the late growth, so don’t be greedy by simply expecting a profit to be turned.

However, it’s not just the currency now that can be traded for all things digital built on the blockchain. Many new products and service offerings allow people to invest in digital assets.

What are the other options?

One recent area of interest has come in the form of NFTs, which are also known as non-fungible tokens. These items are deemed so because they are unique, meaning owners cannot exchange them for something of the same value as no two are the same.

To better understand, consider a real-world example of a piece of art, say the Mona Lisa; if you have the original, you can’t exchange it for another as there is only one in the world. NFTs are certainly attracting interest, with the most recent sale of a unique digital image fetching $91 million at auction. However, with growing numbers of them being created, and as most being primarily valued by subjective metrics such as buyer demand, the high prices may not last forever.

Digital tokens are another developing digital asset, arguably seen as a hybrid of the two previously mentioned options. They’ve been particularly popular with sports fans, as companies such as Socios offer supporters the chance to buy a new line of digital collectibles built on the blockchain and branded in the colors of their favorite organizations such as the UFC. However, investment in the token also gives them the right to access other services and products exclusive to the investor, giving them an added value.

As the numbers of the tokens are strictly limited, this is driving up demand. While the value of the tokens themselves can appreciate and depreciate, other than using a small amount of crypto to make the initial purchase, they’re not tied to the currency, making tokens a less volatile investment, which lessens the risk of significant losses.

Summary

Overall, there’s no sure-fire way to make a huge return. Still, by considering the options, it’s more than possible to utilize investment in digital assets as another way to ‘Accumulate Wealth from Home’ as we’ve previously discussed on Lifelong Financial Security.