CRYPTO, NFTS AND OTHER DIGITAL ASSETS
What is it?
Digital assets such as cryptocurrencies, non-fungible tokens (NFTs), and virtual real estate, are an emerging class of asset that exist purely in digital form, and include a right to use.
Photos, artwork, documents, music, anything unique you create, can be turned into a digital asset. An NFT is a record of ownership of a digital asset.
How do you invest?
You can ‘mint’ your own digital assets and list them on an NFT marketplace for sale, or you can purchase digital assets on a digital marketplace or virtual currency exchange. Digital assets are purchased with cryptocurrency so you will need to set up a digital wallet and buy some cryptocurrency if you want to invest in a digital asset.
Where to get more information
As a decentralised emerging asset class there is no single, reliable source of information that covers this market. Search ‘investing in digital assets’ to find articles and blogs on the topic.
These are high-risk speculative investments which are traded in very volatile markets
- As there is no centralised control of these markets, so you may have no recourse if things go wrong, for example your digital wallet is hacked
- Digital assets generally do not generate an income, although creators of NFTs can receive royalties every time their creation is sold or used
- The value of a digital asset is largely based on buyer demand.
- NFTs may have specific licence rights so check the licence agreement to determine your rights before buying