Diversifying the portfolio to include more than one asset class is one of the elemental principles of investing. While currencies like INR or Dollar do provide liquidity to the individual to work through their daily expense, their value/purchasing power decreases with time and hence aren’t considered a good instrument to park your value.

Some of the popular asset classes for investment are:

1. Gold
2. Real Estate
3. Bonds
4. Stocks

People who have a higher risk appetite and are looking for higher gains on their investment tend to have higher exposure to an asset class like stock.
The underlying principle in investing in stocks is to take the risk of owning a portion of the business that contributes to a greater proportion of the economic growth.

This principle has worked well till now because most of the new businesses that were being built would eventually go public and list their stocks for investors to trade.

Take the digital economy for example. The world economy stands at over $90 Trillion now and the digital economy contributes $11 Trillion out of that. That's over 13% of the world economy and all of that has been built in the last 30 years.
No wonder the best investment options in the last 30 years have been the FAANG companies each of which are either digital companies or have grown huge with their digital footprint.

Just like the Internet was one of the biggest technological leaps for mankind in the last 30 years which created the digital economy, similarly Blockchain Technology is expected to be one of the next big technological leap, and it's expected (speculated) that the decentral economy will be the next big thing.

However, projects that are being built using blockchain tech are different from companies that were built during the manufacturing boom or service boom, or the internet boom. The overall value of these projects isn’t evaluated using the shares but with the token that governs their overall value.

Hence, crypto tokens become the new asset class that's evaluating these new growing segments of our economy.

Now the incoming of a new technology is mostly followed by multiple cycles of:

MANIA ->  FRAUDS ->  CRASH ->  REGULATIONS.

Usually, when there is a new capability being built, people tend to overvalue those products. There is a mania that pushes the price of the new assets to higher than what it deserves. During the early days of the internet in the mid-90s and late 90s, the dot.com company enjoyed this mania part. Similarly, the DeFi summer in mid-2021 closely resembled that when Bitcoin and the altcoins had peeked their value.

Fraudsters contribute an unavoidable part of our society. Wherever there is a mania, fraudsters and scamsters find ways to dupe and rug-pull users of their money. Millennials might remember the Nigerian prince scam as one of the many frauds that plagued the internet in its early days. Similarly, the crypto industry too has had its fair share of scams and frauds.

Usually following the mania and frauds are the crash that corrects the market to a more reasonable number but if the underlying technology is fine the value is built over the long run.

Such is our expectation with the crypto industry too. Still, an investor needs to identify the mania, frauds, and scams correctly so that they can invest in the new asset class over a long period with profit.

While having a deep understanding of the sector makes you self-sufficient, a more suitable way for investors to take exposure in any new asset class is with the help of wealth managers while holding custody of their assets.

This is what Next Tales is focusing on. We aim to provide users a way to take exposure in the crypto market by subscribing to theme-based ideas called Crypto Baskets while holding the custody of your assets. What are these you ask?

Stay tuned for more news from our side to catch up on Crypto Baskets.