Advantages and Disadvantages of Digital Asset Investment

Rancakmedia.com – Investment activities are one of the driving forces of the global economy because these investment activities are able to increase the economic value of an asset that is the investment destination. For organizations and investors, the selection of investment instruments in their financial portfolio is quite significant.

The investment portfolio they manage must be able to increase the company's and investors' income. That way, they will be very selective in choosing investment types and instruments. Investment instruments that are generally sought after by investment managers and investors, in theory have two special characteristics, namely large returns and minimal risk.

However, there are also additional factors that form the basis for choosing an instrument to invest in. These factors include, for example, the character of investors whether they are included in the risk seeker or risk averse group, the convenience of buying and selling again, and the possibility of the future.

In addition, tax rates, purchase costs, and others. Therefore, in investing it is not enough just to see the benefits and dangers. It's also important to look at other factors.

Currently there are various investment products to choose from. Starting from investments in immovable commodities, such as property and land, movable goods such as precious metals, to intangible assets such as stocks, stocks and debentures.

Along with the growth of digital technology, now there are assets finance based on digital technology (digital assets) that are starting to be in demand by the public. The emergence of digital assets has certainly brought more options for investment managers and investors to expand their asset investment portfolios.

They are starting to see digital-based financial assets as part of a portfolio of various conventional financial assets. Digital financial assets, such as digital money in the form of cryptocurrency, have become one of the most popular financial tools.

There are various types of cryptocurrencies on the market, such as bitcoin, ethereum, ripple and others. The popularity of cryptocurrencies is evident by increasing the value of various cryptocurrencies in just a short time. It was unexpected that large organizations as well as private investors started making cryptocurrencies a component of their investment portfolios. 

Advantages Of Digital Assets

Digital assets are now enjoying a thriving age as their value is surging rapidly and exceeding that of other traditional financial assets as well as immovable assets that have become investment instruments.

Investment managers and investors consider investing in digital assets to provide various advantages and disadvantages when compared to traditional investment assets. First, digital assets tend to offer very high returns. For example, cryptocurrency assets such as bitcoin in 2011 were still valued at just US$1, then reached US$1,000 in November 2013, and today are valued at over US$50,000.

Second, digital assets are liquid assets, meaning they are easy to trade or cash out quickly because they can be traded anytime during the 24 hours.

Third, these digital assets use digital technology as the basis for goods and transactions so that they can be managed at any time by the owner of the asset. Therefore, information regarding changes in price and trading volume is highly visible.

Fourth, digital assets can be seen and traded anywhere without being limited by the physical territorial boundaries of a country. Fifth, digital asset transactions are more direct, so there is no need for an intermediary or intermediary function. The result is that the purchase costs of acquiring these assets are reduced because there are no more intermediaries to charge fees.