February 22, 2022
“Crypto” is not just another asset class.
Just like the internet was not just another media channel. But in 1999 that’s what everyone thought the internet was. Back then, everyone seemed to think they needed an “internet strategy” to go alongside their radio, tv, or newspaper strategy.
We’re seeing the same sentiment with crypto today.
But in the long run, currencies, equities, bonds, commodities, art, collectibles, derivatives, real estate, etc. are all likely to be traded on blockchain rails. They will all be “crypto.” (except we’ll probably be calling it something else).
There are many reasons for this. Blockchains are far superior to the legacy tech used within traditional finance in the following areas (to name a few):
– timing of settlement (instant)
– finality of settlement
– transparency of settlement
– peer to peer settlement
– user control of assets (allows for staking, collateral for loans, etc)
– user access to clearing & settlement
– triple entry accounting (automatic audit function)
– immutable ledgers
– security & custody
– enhanced velocity
– enhanced business models (users are paid to provide services to the networks)
– reduced costs (due to smart contracts)
– global, 24/7 trading
H/T to ARK Investment Management LLC for the visual.