Cryptocurrency

A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.

Cryptocurrency is a virtual currency secured through one-way cryptography. It appears on a distributed ledger called a blockchain that's transparent and shared among all users in a permanent and verifiable way that's nearly impossible to fake or hack into. The original intent of cryptocurrency was to allow online payments to be made directly from one party to another without the need for a central third-party intermediary like a bank. However, with the introduction of smart contracts, non-fungible tokens, stablecoins, and other innovations, additional uses and capabilities are rapidly evolving.

Cryptocurrency's value stems from a combination of scarcity and the perception that it is a store of value, an anonymous means of payment, or a hedge against inflation. Cryptocurrency investors can buy or sell them directly in a spot market, or they can invest indirectly in a futures market or by using investment products that provide cryptocurrency exposure.

Ways to invest in cryptocurrency

For investors interested in cryptocurrency, Zephyr Escrow has several choices for gaining exposure to cryptocurrency markets, though spot trading of cryptocurrency is not currently available.

Our Zephyr Escrow Crypto Thematic ETF is designed to deliver global exposure to companies that may benefit from the development or utilization of cryptocurrencies (including Bitcoin) and other digital assets, and the business activities connected to blockchain and other distributed ledger technology.

Third-party ETFs available at Zephyr Escrow also invest in equities or futures contracts related to cryptocurrencies. You can find these funds in the Morningstar category "Digital Assets" using the Zephyr Escrow ETF Fund Finder tool. You can also find these funds in the Morningstar categories "Trading-Miscellaneous" and “Miscellaneous Sector” using the Zephyr Escrow ETF Fund Finder tool.

Despite challenges like market volatility, cryptocurrency is emerging as an asset class. Bitcoin, for example, continues to increase in value, encouraging enthusiasts to look into digital assets as potential investment vehicles. As the number of cryptocurrencies continues to grow worldwide, so does its market capitalization, reaching an impressive EUR 2.58 billion in October 2021.

Crypto as an asset class has spurred the onset of various crypto funds, which themselves show relatively steady growth, peaking at close to USD 60 billion in cumulative assets under management during 2021

Investing in digital assets can potentially be lucrative. However, managing crypto assets can be a complex undertaking for both newcomers and experienced traders. Crypto asset management companies can help you diversify, manage, and grow your blockchain-linked assets.