The world of investing is in a constant state of change. It is vital to always keep your eyes open for new investment opportunities. At a time when traditional forms of investment such as shares and bonds sometimes no longer offer the same returns as they did a few years ago, many investors are looking at digital assets and crypto investments. But what makes this asset class so interesting?
Digital assets offer a new way of investing, have lower entry barriers and are not yet as saturated as other investment opportunities. It is possible to land a "lucky punch" with cryptos, tokens or NFTs, where a high profit can be made. The risks are correspondingly not far away where the opportunities are great. Volatility can swing both ways, so it is always important to know your own risk tolerance and risk capacity before investing - no matter what asset class.
Trading cryptocurrencies such as Bitcoin, Ethereum, Ripple and Co. are nothing new and there are many platforms that allow trading, such as the Cointract app. However, we are on the lookout for new investment opportunities. Here are some digital assets that could have a promising future.
Tokens and NFT
What are Tokens?
Tokens are digital assets based on blockchain technology. Think of tokens as digital coins or stamps that you can use for specific purposes. Tokens can take on different forms and be used in different projects.
An example of a well-known token is the Ethereum token, which is used for transactions and the operation of decentralised applications (DApps) on the Ethereum blockchain.
Tokens can be traded, collected or given as rewards for certain actions. They offer the opportunity to participate in certain projects or ecosystems.
Non-Fungible Tokens (NFTs) are a special type of token that are unique and non-exchangeable. Unlike traditional tokens such as Bitcoin or Ethereum, where each unit is of equal value, an NFT represents a unique digital asset or deed of ownership. This means that NFTs can stand for specific digital artworks, collectibles, virtual properties or other unique digital assets. NFTs are registered on a blockchain, which ensures their authenticity, immutability and traceability. Due to their uniqueness and the growing interest of collectors and investors, NFTs have recently gained a lot of attention. However, it has always been considered a gimmick up until now. In the future, however, NFTs will play a big part in the investment market and the metaverse.
What asset classes are there?
Art: Artists can sell their works as NFTs and prove their authenticity and originality. Investors can acquire a part of the artwork through fractional ownership and thus profit from the long-term increase in value of the art.
Music: NFTs allow musicians to offer their music as digital collectibles. These can include rare tracks, limited editions or exclusive access to concerts and merchandise. Fans can collect music NFTs to support their favourite artists.
Real estate: Trading virtual real estate, especially in virtual worlds and games, is becoming increasingly popular. Digital land, houses and other virtual assets can be sold and traded as NFTs, creating unique ownership and investment opportunities. The potential of the metaverse is gigantic. If investors buy a property in this digital environment, it can be rented out afterwards. That is because cities are being built in the metaverse - just like in the real world.
Corporate: NFTs can act as digital ownership stakes in companies, allowing investors to share in the company's successes.
Fan tokens: These tokens allow fans to receive exclusive benefits and rewards, such as access to special events or the opportunity to participate in team decisions. Fan tokens create a closer bond between fans and their idols.
This is not an exhaustive list of digital asset usage areas. They are just a few examples.
Automated crypto trading
A promising way to profit from the volatile crypto markets is automated trading with cryptocurrencies. By using advanced algorithms and tools, investors can automate their trading strategies and thus optimise their chances of making a profit.
At Cointract, we already offer this option. With Cointract's app, you can set rules for buying and selling cryptocurrencies to automatically execute trades. This automated approach allows you to react quickly to market changes, buy at low prices, maximise potential profits and limit losses as much as possible.
Take a look at the app and see for yourself.
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