Types of Crypto Assets

Some of the more common types of crypto assets you may encounter are:  

Cryptocurrency 

Cryptocurrency is a digital currency or medium of exchange. It can be used to buy products or services, or for speculative purposes, such as trading on a crypto asset trading platform (CTP)  

Cryptocurrencies have no inherent value; their perceived value is based largely on supply and demand in the market. Examples include Bitcoin, Ether, Ripple, and Litecoin.  

  • Cryptocurrency funds: Cryptocurrency investment funds allow you to access cryptocurrencies without directly purchasing, owning, and trading the coins yourself. 
  • Cryptocurrency ETF: A cryptocurrency exchange traded fund (ETF) works similarly to a regular ETF, but instead of tracking an index, sector, or commodity, a cryptocurrency ETF tracks one or more digital tokens.   
  • Blockchain funds: Blockchain funds are similar to other investment funds that invest in a particular industry or sector of the economy, except blockchain funds invest only in companies that have operations related to blockchain technology.   

Tokens 

  • Utility tokens: A utility token uses a distributed ledger or blockchain platform to provide access rights to a specific product or service, or to be used to purchase specific products or services. The provider of the products or services typically issues the tokens, which can only be used within the issuer’s network.  
  • Security tokens: Security tokens are sold or auctioned in a token-generating event such as an Initial Coin Offering (ICO) or an Initial Token Offering (ITO). These events allow businesses to raise money to fund an idea or business model.  
  • Non-fungible tokens (NFTs): NFTs record ownership of a unique tangible or intangible object—such as a song, digital image, or video. “Non-fungible” means these tokens cannot be exchanged for one another—each one is unique. NFTs are relatively new, even for crypto assets, and the regulatory scheme and marketplace for NFTs are rapidly evolving.