Are you too late for cryptocurrencies? | Currency News | Financial and economic news

The recent surge in digital asset prices may leave some cryptocurrency-curious investors feeling like they’ve missed their entry opportunity. Bitcoin is up about 50% year to date and about 135% over the past year.

However, zooming out to look at the transformative nature and relatively limited current use of blockchain technology (compared to the performance of each individual asset built on top of it) reveals how much of cryptocurrencies’ potential economic impact remains untapped.

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Separating Blockchain from Bitcoin

Investors who are focused only on Bitcoin’s current price appreciation and its potential economic impact (albeit substantial) are looking beyond the fundamental driver of cryptocurrencies’ value proposition to the broader global economy: blockchain technology. Blockchain’s use cases for powering broader transactions and interactions with information far exceed those of any single asset, with the potential to increase efficiency across a variety of industries. Figure 1 puts the breadth of market opportunities for cryptocurrencies into perspective by identifying areas particularly suited for blockchain innovation:

Figure 1: A comparison of asset valuations

The industries and assets ripe for blockchain-driven efficiency represent an incredibly broad and diverse set fundamental use cases. Let’s analyze some representative examples:

• Financial services: the value proposition for decentralization of financial services covers wealth management, trading, insurance, payments and more.
• Entertainment and gaming: Decentralizing content distribution, improving royalty payments and providing secure in-game monetization are just some of the aspects fun– AND gameuses related to blockchain technology.
• IT infrastructure: Secure, decentralized and distributed data AND computing power deliver more efficient and connected infrastructure solutions for technology-enabled businesses.
• Fixed income: Earlier this monthTokenized US Treasuries have surpassed the $1 billion mark, marking a first milestone for the real world resource (RWA) tokenization movement between asset classes.
• Real estate: Smart contracts adapt very well to a variety of real estate use cases, including transfers of ownership, recurring fees/revenues and financial derivatives. Smart contracts used in this way could disrupt many industries where intermediary brokers stand between buyers and sellers.
• Conservation and transferability of value: Bitcoin’s classic value proposition: native cryptographic characteristics (portability, divisibility, scarcity, etc.) lend themselves well to mirroring gold or fiat currencies as a store of value.

Conclusions for new (and old) cryptocurrency investors

Instead of asking: “Have I missed my chance?” potential investors in digital assets should ask themselves: “Do I believe in the transformative nature of blockchain technology?” Investing in digital assets should represent a belief in the far-reaching value proposition of blockchain technology, ranging from the variety of sectors that make up the macroeconomy to transactions that encompass everyday markets and the human experience.

A thoughtful multi-asset approach to portfolio construction and ongoing management is critical to ensuring that cryptocurrency investors capture the full value proposition of blockchain innovation.

This story originally appeared on Coindesk

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