Everything you wanted to know about crypto assets but were afraid to ask
Should you refer to Bitcoin et al as crypto assets or cryptocurrencies?
Economists have quite a strict definition of what can be labelled as “money” or “currency”. To be considered as such, it must combine four attributes – it must be a medium of exchange, it should serve as unit of account, it has to be able to store value and finally it must be legal tender. For the time being, none of these four criteria appear to be met for Bitcoin or any other so-called cryptocurrency. First, none of them have become a significant and broadly accepted means of payment. Second, except crypto exchanges, only a handful (individuals or institutions) refer to value or worth in Bitcoin. Third, Bitcoin price swings make it hard to consider it as a stable store of value (Exhibit 1) and lastly it is not legal tender. For these reasons, we prefer the term crypto assets...
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