You have probably been wondering what the value of your Bitcoin is and whether it is a currency or an asset. Though the coin itself is categorised as a cryptocurrency, the point that many people miss is your cryptocurrencies are an asset more than it is a currency.
Bitcoin and all the other cryptocurrencies such as Ethereum are all virtual currencies that you can use in buying products or even trading. However, they all have several elements that fit within different classes of assets. When you think about it, Bitcoin is much more like gold, except for the fact that it is virtual.
Why is Bitcoin like gold? Here is an expert’s explanation. Bitcoin is a commodity with many similarities to gold says Jeff Currie, global head of commodities research for Goldman Sachs Group Inc. “I don’t see why there is all this hostility to it,” Currie said in an interview on Bloomberg Television. Bitcoin is “not much different than gold” because it doesn’t have liability attached to it, like a security.
Cryptocurrency’s isn’t replacing gold, they are working side by side, the end result is the world has a new commodity. The concept of using your cryptocurrencies as an asset opens many doors in the mainstream financial world, like in banking and investing.
Unlike the regular currencies, Bitcoin currency has an underlying asset that underpins its value. Regular money is just a unit of account used to market goods and services in the domestic market, and it varies from one economy to another. However, your Bitcoin is an asset, and its value is not affected by geography but rather its scarcity in the market.
In the recent news in Bitcoin Magazine, the South Korean Supreme Court ruled that Bitcoin falls now under the category of an asset. This simply means that you can even now invest using your Bitcoin in places such as the new Central Bank of Cryptocurrencies (CBC). Remember just like every other asset, your cryptocurrency provides you with financial value, and you can easily sell it or use it as collateral in accessing loans or making investments.