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3 reasons why cryptocurrency is nothing more than a digital asset

3 reasons why cryptocurrency is nothing more than a digital asset

Many people idealize cryptocurrencies by giving them too high a status. HODLers are selling houses and borrowing money to buy Bitcoin in hopes of getting rich by 2022. While the idea behind Bitcoin, Ethereum, IOTA, XTZ and many other coins and tokens is great, and that the world of digital currencies will likely continue to grow, pushing blockchain technology to evolve, high hopes and expectations should be weighted accordingly. Below is the list of three reasons why a cryptocurrency is nothing more than a digital asset.

Cryptocurrency Fact 1: Institutions Trade Crypto

Have you wondered why the Bitcoin price is rising? Institutions trade cryptocurrencies. The process is described the same way it appears on the stock and commodity markets. The big players on the field determine the outcome. There is very little influence that comes from average Joes, crypto enthusiasts. Wall Street dominates the game.

Cryptocurrency Fact 2: Banks Use Crypto

If you’re stuck in 2017 and still believe this is a “banks versus crypto” game, wake up. Distributed ledgers are now actively used by financial institutions. JPMorgan and Goldman Sachs have their coins which are used for “liquidity on demand” purposes.

Cryptocurrency Fact 3: Governments Control Crypto

At first, cryptocurrencies attracted early adopters by providing a level of independence. Many people saw digital currencies as a unique way to control their own money. Today’s reality is far from the original concept proposed by Satoshi.

First and foremost, cryptocurrencies are illiquid. You cannot shop with crypto. Digital coins are a store of value, not digital money. It is still necessary to exchange crypto-currencies against fiduciary money in order to be able to buy a product or a service. Additionally, all service providers that exchange digital coins for cash are controlled by the government. In the United States, the IRS knows precisely how much money you make from crypto.

3 reasons why cryptocurrency is nothing more than a digital asset

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