Exploring the World of Cryptocurrency

As per Carl Menger    “Money is not an invention of the state. It is not a product of the legislative state”. We did not require the government to originate money, it has emerged over the years, then why do we need them to guard our money. With the rise of decentralisation and immense development in technology, people have started to believe that they may be able to reduce banks’ role.  The numerous bank runs and financial disasters have made people lean towards decentralised currency (Cryptocurrency) and they do not want to give banks control over their money.  Cryptocurrency is hyped for various reasons like, people feel safe as they have control over the money, they can initiate faster cross-border transactions with lower fees compared to banks, it has a public ledger so everyone can see what everyone is doing, no fear of double spending and losing transaction information. The reasons that make cryptocurrency exciting also makes it scary, it is decent...

The allure of cryptocurrencies has continuously kept us fascinated. Virtual currencies are a frequent topic of discussion among everyone from retail investors to general members of society, this accelerating market - a subset of a market named “digital assets”.  The tormenting financial crises of the previous two decades has driven regular investors, traders, stakeholders, and policymakers to seek alternative investments that help them with diversification benefits.  In my last blog, we observed that bitcoin cannot currently be used as a hedge against inflation, but let's see if other cryptocurrencies, in addition to bitcoin, can be used as asset diversity to boost portfolio performance.  Cryptocurrency’s privileges of high return and minimal correlation with conventional assets have piqued investors’ excitement but at the same time, its excessive volatility often scares them away.    In the thirst of perceiving if digital currency is a new investment opportunit...

Over many years, speculators, researchers, and others have investigated ways to mitigate the potential risk of inflation, and the solutions are typically a combination of several asset classes (stocks, gold, or income) depending upon the shock and geographic condition.  However, in recent years, Bitcoin has attracted a lot of attention and is now viewed as a currency that may be used to protect us against inflation.  Bitcoin is the original Cryptocurrency that was founded in 2009. The reason behind the rise of bitcoin is that we can quickly transfer money across borders and it has very low charges as there are no legal entities involved.   Bitcoin is restricted to 21 million units , which state that after the final bitcoin is sold there will be no more available for purchase. It was designed to constantly store purchasing power and the government or central bank has no role in reducing it unlike, fiat currencies are unlimited and their purchasing power will diminish wh...