ETMarkets Crypto Conclave: Is crypto to be considered seriously as an asset class?

ETConclave on cryptocurrencies finds out the recognition and definition of crypto as an asset class in conversation with Avinash Shekhar, the CEO of ZebPay and Joel John, the head of Ledger Prime. Crypto assets have long been called an asset class. An asset class is a financial instrument typically having similar financial characteristics. But does crypto fall in the category and if so how?

Avinash believes that crypto has all the attributes of an emerging asset class. The attributes include holding value across space and time for years and some legitimate use cases. He believes that the use cases of cryptocurrencies could be even bigger than the Internet which will come into the picture only in the further stages of the digital revolution. Another important trait of this asset class is volatility which is an inseparable trait of any growing asset class as has been the case earlier for oil too. He believes that the volatility of virtual assets would come down as it gets more firmly established. At the same time, he affirms that price volatility won't diminish due to the increasing financial literacy among crypto enthusiasts and a consequent rise in the crypto buyers and traders over the past 5 years. The Fear of Missing Out (FOMO) has also slid down from before and will continue to as the crypto users gain maturity.

However, Avinash does not see any relation between volatility and the decentralised character of cryptocurrencies. He stands strong by the quintessentially decentralised character of cryptocurrencies, where users exercise power and define rules which make crypto the most sought after and unique asset class. He believes a truly decentralised system lessens the chances of manipulation and abuse. The newness of this asset class having a 24x7 trading regime also makes it an attractive option.