Cryptocurrency Is Not An Asset Class

Many years ago, Marc Andreeson penned an article in the Wall Street Journal titles, Why Software Is Eating The World. In it, he laid out the case of how we were heading towards a truly digital future and the largest companies would be those based upon software.

A decade later, his view is realized. Right now the two largest companies in the world are Microsoft and Apple, followed by Amazon and Google. All built software platforms that enable them to leverage their returns. These companies just keep growing in size, with no signs of slowing down.

Andreeson was not referring to cryptocurrency but it certainly fits into this model. This is a software based monetary system that is unlike anything the world has seen. It was designed specifically for the digital world which makes it ideal for what is about to come.

Recently was saw the entry of Wall Street and other mainstream institutions start to enter through the purchase of Bitcoin. This, of course, got the typical market observers involved, leading many to believe cryptocurrency is another asset class.

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These entities simply look at cryptocurrency as something else to invest in. To them, it is a way to get a return on their money. Hence, there is no different between cryptocurrency, commodities or equities. They all are investment classes to move in and out of.

This is a mistaken view. Cryptocurrency is not an asset class. The sooner people realize this, the better off they will be. To taking this view is to miss the larger picture.

So if cryptocurrency is not an asset class, what is going on?

Actually what people need to focus upon is that all assets classes will be crypto. This slight change shows how large this is going to be. It also spells the doom for a lot of mainstream institutions that appear to be permanently locked in our lives.

The process of tokenization changes the entire spectrum of investment. It goes to the core of all asset classes and brings them under this umbrella. There is not likely to be anything that does not get converted over in due time.

It is also a point that Wall Street misses.

They are approaching things like it is business as usual. This is far from the normal course of financial business that we are accustomed to. Instead, it is a radical shift in the control and ownership of assets.

We also can see how this will all lead to the removal of "middlemen", who really are nothing more than rent extractors from the system.

This is going to lead to a massive explosion is wealth generation. Anyone who owns an asset will be able to get it liquid. This will open up other financial avenues for people. At the same time, the ability for billions of people to get involved in this arena means that the distribution will be spread out. Creating an inclusive system will penetrate every asset class that we can think of.

Basically, this is a lot more than just banking the unbanked.

Through this process, we are going to see the elimination of the markets as we know them. Equities, commodities, FOREX, and bonds are all going to be wiped out. This means the present exchanges will not survive, at least in their present form.

Instead, all these assets will ended up being tokenized. This means they all can be traded for each other. Have some gold and want to swap it for shares in Apple? That can be done. Want to take a part of your home to invest in space exploration, you can do that. Swapping tokens of all types will be instant and seamless.

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This means that the assets classes do not operate on different types of exchanges. In fact, the class itself is eliminated. They are all simply assets.

Big or small. Local or global. It is not going to matter. All will fall into the same category. The opportunities for involvement are only going to keep growing, to near infinite proportions.

Naturally, we have to extrapolate this idea into the virtual world also. People's creations can be traded the same was as IBM or Amazon stock. This will entice even more players into the system. Whatever is of interest to people is something that will be monetized. If the interest is large enough, there will be significant value.

Here is how we see the opportunity for financial freedom opening up to all. Whereas we are operating on a system where people need to have money to get started, the tokenization process is already opening up a forum for people to get rewarded. This means that they are getting the basic resources to begin their journey.

At the same time, their own creativity, work ethic, and talents will be tokenized, enabling them to multiply their financial holdings.

The key is that the masses can participate in the creation of trillions of dollars in new wealth. This is not only from a user perspective but also an ownership one.

Ultimately, we end up with a system that has massive liquidity. Since it is all is effectively in one pot, everything is tradeable for anything else. Of course, there will be some limits in terms of what the wallets can handle depending upon the protocols that are embraced. However, as long as something uses whatever becomes the accepted norm in that area, all liquidity could potentially apply to all assets.

This means that the liquidity, overall, is available; the only question is there interest in that particular asset.

It is an entirely new paradigm that is being constructed. This is also something that is guaranteed to happen. While the existing system still holds on, its forum is the physical world. It is not designed to embark into the virtual world, one that is rapidly appearing.

Thus, it is likely we see this massive explosion in the virtual realm first and then extending outward to claim the assets that are now represented using traditional models.

Therefore, cryptocurrency is not an asset classes; all asset classes will end up being cryptocurrency.

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