Regulations surrounding cryptocurrency are still evolving. ![]() If an individual is seeking exposure to cryptocurrency, they can also purchase an ETF, buy a cryptocurrency focused mutual fund, or own the stock of a company that focuses on cryptocurrency, such as Square. To purchase cryptocurrency, the individual must open an account, deposit cash, and place a trade order (buy). On the other hand, a younger investor able to tolerate a high level of volatility may consider cryptocurrency to be an important and/or diversifying component of their portfolio.Ĭryptocurrency can be purchased through a broker or exchange, such as Coinbase. For example, a retiree seeking to draw on a stable pool of income may not find highly volatile cryptocurrency appropriate for their portfolio. For these reasons, whether cryptocurrency is a good investment may depend on the profile of the particular investor. ![]() As with stocks, cryptocurrency may offer the potential for a high level of returns, but also the possibility of significant price volatility as well as losses. On the other hand, cryptocurrency may also be considered to be an asset class for investment, similar to a stock. For something to be considered money, it is typically thought of to possess three basic traits: (1) it is a store of value, (2) it is a medium of exchange, and (3) it is a unit of account. For example, some consider cryptocurrency to have money-like qualities, particularly Bitcoin. Some argue that cryptocurrency is a superior form of value transfer because it offers a level of privacy, security, and immutability (irreversibility) that traditional money does not offer.Ĭryptocurrencies can be thought of in several different ways. Cryptocurrencies also facilitate the quick global transfer of value, 24 hours a day, seven days a week. In addition to facilitating the transfer of value, each cryptocurrency may have different technical features.Ĭryptocurrencies allow parties to transfer value online without the use of a central counterparty, such as a bank. Some estimates of the total size of the cryptocurrency markets place it around $3 trillion. It is difficult to estimate the total market size of all cryptocurrencies, since, unlike the public equities markets, there is no official data source. The market capitalization of the second largest cryptocurrency, Ethereum, is less than $500 billion. The market capitalization of Bitcoin is almost $900 billion, as it is by far the largest cryptocurrency. How many cryptocurrencies are there and what are they worth?Īccording to CoinMarketCap, there are now more than 16,000 cryptocurrencies. Today, there are many other cryptocurrencies, including Ethereum, Tether, Solana, and Cardano. Bitcoin was the first cryptocurrency, and it rose to attention beginning in 2008. Cryptocurrency operates through distributed ledger technology, known as blockchain. ![]() Cryptocurrency adheres to a decentralized form of governance and control, as opposed to a central banking authority. Cryptocurrency is decentralized digital money that is used on the internet.
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