Beyond the bound of bitcoin

San Francisco (CNN)Bitcoin may be the most popular form of digital currency but it’s far from the only one.

In fact, about 1,500 other cryptocurrencies have emerged since the creation of bitcoin in 2009. And they fall into buckets like stable coins and tokens.
Coupled with the lack of clear regulations or oversight and how new the space is, it’s enough to leave any crypto newcomer completely confused.
Crypto is valued by investors because it’s not regulated by any central figure. It’s also exchanged pseudonymously, which allows for greater privacy.
While it was originally used for illicit transactions, it’s gained wider adoption. Even companies like Overstock and Starbucks have started experimenting with how to let customers use it to shop.
Investing in crypto is still risky and volatile — let’s recall bitcoin’s infamous rise in value to $20,000 late last year and its current price of under $5,000.
Because of this, knowing the core differences worth your time.

Security Tokens

Security tokens are still relatively new. Their value is derived from real-world assets, which could include commodities like gold or oil, shares of a company or interest in a fund. These tokens are meant to be investments and because they’re considered securities and subject to federal security regulations.
Some fans of security tokens argue they would ensure greater accountability for companies because shares would be public and couldn’t be over-issued.
Both Hayner and Taylor say these tokens are still a ways off from showing up in people’s portfolios because of uncertainty around how they’d be regulated.
And according to Stephen Innes, head of trading in the Asia Pacific for online trading platform Oanda, security tokens still don’t provide enough of a “consistent metric off which to base an underlying investment strategy.”
Security tokens, which would be regulated, also go against the very core of what crypto was meant to be — a deregulated currency. But regulations would be a draw for investors.

Future of money?

Digital currency is becoming more mainstream as companies like Starbucks and Goldman Sachs experiment with how to engage with it.
It’s unclear whether crypto will be the future of money, but its volatility isn’t helping its case for wider adoption. As values continue to drop and rebound, investors continue to show caution.
“There’s a lack of adoption on Wall Street,” Innes said. “The big banks that most people are doing with are reticent to get involved, which I think is telling.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes