Investing in crypto
We live in a world filled with financial and monetary uncertainties. High inflation and loose monetary policies are the basis for alternative ways to preserve and build wealth. Amdax stands for improving the financial system, with a significant role for bitcoin and digital assets.
Investing in the new financial system
Bitcoin represents an alternative to the traditional central financial system. Bitcoin is digital and sovereign money; it exists independently of the efforts of a government, central bank, or commercial company. The power over it lies with the users who collectively ensure that everyone complies with the rules. There is no central party that can change the rules, such as increasing the amount of money. It's not surprising that bitcoin is sometimes referred to as "digital gold".
Bitcoin is the most disruptive technology of the 21st
century
The advent of the internet has digitized information. Wikipedia is the new encyclopedia. Streaming services replace CDs and DVDs, and Google Maps makes a road map redundant. However, digitizing money was not so easy. The basis for this lies in the double-spend problem. If you share something online, for example, a photo. The recipient receives a copy. The multiplication of the product is fine for a photo, but not for money. The technological innovation of bitcoin makes digital property transfer possible. The essence of the invention of bitcoin is that it makes it for the first time possible to transfer something digitally from one person to another, without a central party keeping the books or administration. The strength of bitcoin lies in the following unique properties:
- Bitcoin is open: anyone can participate without needing permission.
- Bitcoin is global: the network crosses borders, is established nowhere, and has no physical location.
- Bitcoin is neutral: the network has no political or religious preference and has no opinion on how, when, and where you spend your money.
- Bitcoin is censorship-resistant: no one can stop or reverse transactions, and the network cannot be shut down.
- Bitcoin is public: the system is verifiable for everyone, allowing it to be checked whether all rules are being followed.
Digital assets: from bitcoin to a fully-fledged new asset class
It took bitcoin six months to get 1,000 users, and five years to find a million users. Today, nearly fourteen years after its founding, it has more than 300 million users, equivalent to four percent of the world's population. At its current growth rate, there will be a billion users in the next three years, which equates to twelve percent of the world.
After the invention of bitcoin in 2009 and the launch of Ethereum in 2015, a explosion of innovation occurred. Parallel to the professionalization of the market, we see a new investment category emerging: digital assets. In addition to bitcoin, there are five main domains:
- Decentralized Finance (DeFi) is a form of financial service based on blockchain technology. DeFi makes financial services, such as buying and selling and (borrowing and) lending, possible without the intervention of a central authority, making it an open and decentralized alternative to traditional financial services.
- Stablecoins are crypto assets that are linked to the value of another asset, such as the dollar or euro. Therefore, the value of stablecoins are stable, and they are often used as a way to reduce the volatility of other cryptocurrencies and are suitable as a means of payment.
- The infrastructure refers to everything that is necessary to make the network function and process transactions, such as hardware, software and protocols. In addition to the so-called 'layer 1' blockchains, such as Bitcoin and Ethereum, it also includes protocols that link networks and physical objects.
- Central crypto exchanges are online platforms that enable users to buy and sell crypto assets using traditional currencies. They are centrally regulated and play an important role as a gateway to buying and selling cryptocurrencies.
- A Non-Fungible Token (NFT) is a digital proof of ownership that can be transferred to another. NFTs are non-exchangeable and unique and are used to verify and represent ownership of digital goods or assets, such as (online) artworks and digital access cards. Digital property plays an important role in the metaverse (virtual worlds you can enter through virtual reality).
Digital assets as an investment category
We are convinced that digital assets, such as bitcoin and other cryptocurrencies, have the potential to create an open, transparent financial infrastructure. Innovations in this ecosystem have already produced many new opportunities. We believe that the ecosystem of digital assets offers a opportunity for innovative investors looking for new investment opportunities and to diversify their portfolio. The crypto market has become professionalized in recent years. Many risks have been eliminated at the technical and legal level, and central parties are paying more attention to compliance. Market risk has also declined sharply; liquidity is now sufficient to enter and exit with hundreds of millions of dollars. However, investing in crypto assets is still not without risk. It requires technical knowledge, understanding of the market, and expertise to evaluate the quality of different assets.
Amdax is specialised in the future
At Amdax, old and new financial worlds come together. We have made accessing crypto and other digital assets barrier-free. At Amdax, you invest in the future with products and services you already know. In a safe environment and with a focus on your wealth. The combination of the expertise of both crypto natives and financial experts means that we can provide our customers with professional investment strategies in the new world of digital assets. Amdax is familiar with the crypto market and is a leader in safely buying and storing it. Additionally, we specialise in managing your wealth. With over 30 crypto experts, we ensure you can invest in digital assets with peace of mind.Starting to invest in crypto?
Ready to invest in the new financial system? Open an account or have a conversation with one of our advisors first.
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