The Changing Nature of Capital Markets: The New Role of Digital Assets

Digital Assets NFT

Digital assets have arrived, and they’re not going away. Seemingly, each day’s newsfeed carries notice of another milestone in their advancement against traditional assets.

Should you begin incorporating digital investment opportunities into your portfolio? Let’s look at recent news events to understand better how quickly financial markets are having to embrace digital assets and why you should as well. 

El Salvador Affirms Bitcoin... and the Future

On Tuesday, September 7, 2021, the financial world turned its collective eyes to El Salvador as that country became the world’s first sovereign state to declare Bitcoin as legal tender.

The move represents a significant change for digital currency. Previously, many dismissed it as not more than a rich person’s hobby or a source of debate among financial theorists. Now, digital currency gets to exist in an environment where it can no longer be ignored either by old-school economists or the average person on the street.

How many nations will follow El Salvador with other digital currencies? It remains to be seen. However, if digital currency boasts the El Salvadorean economy, other countries will likely make similar moves.

One way that digital currency can help the typical person is by saving them money during transfers. El Salvador depends to a large extent on the money that expats send back home, mainly from the U.S. That money is subject to hefty fees. Blockchain technology eliminates those fees, freeing up more money to enter El Salvador’s economy.

El Salvador's President Nayib Bukele presenting on Bitcoin as a new currency
El Salvador's president, Nayib Bukele

Non-Fungible Tokens: Changing Hands and Minds

A work by the artist Beeple brought at auction $69 million in March 2021. Perhaps, the sale wouldn’t have been of much interest outside the world of art collecting except for one crucial fact: what sold was a non-fungible token (NFT).

The digital token repeatedly makes splashy headlines both inside and outside the heady atmosphere of art with the first tweet garnering $2.9 million. Celebrities and athletes are also using NFTs to sell their merch, including digital autographs.

The flexibility of an NFT positions it to become a reliable future asset class. The token works as a digital record of a buyer’s ownership of an item. The object can be digital or physical. Imagine the impact if NFTs become a standardized form of record-keeping for real-world possessions.

For example, it could simplify the tedious task of transferring a car title. Think of the thousands of similar routine big-ticket ownership transfers that happen around the world each day. Once ordinary people become more comfortable with not needing physical paperwork to authenticate a purchase, they could become attracted to the convenience and low-cost use of NFTs.

Beeple's NFT artwork Christie's
Beeple's artwork which sold for $69 million at Christies Auction House.

Always Rely on Expert Advice For Digital Assets Management

Fortunately, you don’t have to navigate the sometimes-confusing world of digital assets alone. Mawson Infrastructure Group specializes in introducing experienced traditional capital market investors to the fascinating world of digital assets.

Contact us today and learn how Mawson can design a digital assets management program tailored to the specific needs of you and your enterprise. 

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