In the final section of the Vaultavo Academy we’ll be exploring some of the more niche investment options besides conventional crypto trading. Digital markets have experienced a surge in popularity after blockchain technology provided a reliable method of proving authentic digital assets.
Throughout this page we’ll be browsing through some of the best digital trading options and exploring some platforms that you can use to purchase the assets. We’ll be starting from the ground up so that the information is applicable to both experienced traders and newcomers.
What are digital markets?
Digital markets refer to the sale and holding of digital assets in exchange for either digital tokens or conventional fiat currencies. Similar to blockchain, these markets have grown considerably since 2008 to reach market caps that exceed all early projections. Online marketplaces are not new, there have been plenty of online trading platforms but the key to modern day digital assets is that the ownership is verifiable and hopefully accessible with a fingerprint private key. For the first time in history, someone can purchase a digital artwork and prove that it is theirs no matter if copies are made.
The key to this is the development of blockchain technology. When an artwork or digital asset is sold, the change of ownership is recorded in the ledger and the recipient gains the private cryptographic key as proof. Since its conception, digital markets have gained plenty of popularity and some items have traded for millions of dollars. While many remain skeptical of digital markets, they continue to prove that they are valued amongst traders and should be understood before dismissed.
Various types to invest in
Now that we’ve established what digital markets are, you might be wondering what types there are available to invest in? This section will discuss the two forms that have the largest market capitalizations and that most traders consider investing in to diversify their portfolio with crypto custody banks.
A non fungible token, or NFT, is a financial security that can be traded on a blockchain network to record ownership of any digital assets. These tokens are quite similar to cryptocurrency but can be representative of a variety of asset classes whereas cryptocurrencies are simply sold in divisions of one block. Investing in NFTs is a common discussion point amongst the trading public as many speculate whether the ownership actually has any meaningful value. However, despite this, artworks have sold for upwards of $90 million and the community of artists producing them have only just begun.
You most likely would have heard about a metaverse in a SciFi movie but our computing ability has now progressed to the point where fiction is becoming reality. Even Facebook is launching their own metaverse platform and many of them offer the option of using online digital currencies within the virtual realm. There are a few options to get involved with metaverse trading, you could either invest directly in the company that is running the project, such as Facebook, or you could purchase some of the digital tokens that are the native currency of these virtual worlds and hold them with a cryptocurrency custody solution. As more people join, the demand for the tokens will likely increase and your investment may pay off – there is no way of being certain though.
Is it worthwhile?
Whenever you are considering investing in a new market, you need to take into the account the potential of returns. This will differ significantly to the traditional investment options such as stocks and forex. All digital markets are incredibly volatile as the public still shares a divided opinion over the technology’s value. However, blockchain security has revolutionized methods of data storage and protection.
Diversifying your portfolio
One worthwhile opportunity with digital markets is to diversify your investment portfolio. Digital markets are usually decentralized and developed by the community, this makes it slightly more impervious to extraneous variables such as COVID-19, infact, COVID-19 proved to be a fruitful year for digital markets as the general public looked for alternative investments. Whether the traditional markets outlast the digital, or if cryptocurrency surges to record heights, you minimize your risk by diversifying your portfolio as much as possible.
Time vs money
Another meaningful consideration would be the amount of time you spent on gaining any profits. There’s no use making $5 if you’ve spent days on end actively trading. Depending on your investment goal, you might want to research how much time you’ll need to actively spend to reach it. Active trading approaches, such as scalping, will have you sitting at your computer or mobile device throughout working hours trying to take advantage of price fluctuations. It’s a powerful method but it is incredibly time consuming. Explore some of our Academy strategy pages to get a glimpse of other approaches you could take.
Finding you trading partner
Before you can invest in digital markets, you will need to find your ideal fit of a trading partner. There are plenty of service providers on the market and each of them offer some sort of unique perks that advertise their service. If it’s digital markets you’re after, you’ll have to ensure that they offer access to trade them. Cryptocurrencies have become fairly common on these platforms, however digital markets have either been entirely separated or slowly integrated into existing trading platforms.
If the NFT or metaverse digital token is available on the platform, you’ll have to open your account and verify all of your credentials before you are able to make the purchase. We highly recommend that you do your research before completing this step, you need to ensure that the platform has obtained the relevant licensing and that they offer a fingerprint private key option. There are plenty of scams online and recognizing them requires a keen eye. One tip we can give you is to always check the URL of the site you are visiting, if it is a fake, you might spot something fishy.
When your account has been validated, you will have to deposit some of your fiat or cryptocurrency to transact within the marketplace. Most platforms accept a variety of payment methods but you will want to make sure that your preferred method is covered. It’s also worthwhile determining if they are an insurable custody solution. You can usually find this at the bottom of the service provider’s site or you can browse through some user reviews for more information.
Finally, it’s always worthwhile to send a message to their customer support with any queries that you may have. Not only will this give you some answers concerning private key security, but it will also give you an indication of how efficient their support team is if you ever run into any trouble.
Once you have access to the verified account on the trading platform, it’s time to decide which market you will invest in. No matter the case, the private key security of your account is one of the most important considerations. There are plenty of storage services available on the market today, but many of them are simply keeping personal details on a server and granting online accounts access to private crypto keys. Vaultavo recognizes the gap in the market and provides unprecedented security with an edge of convenience.
Our servers are located in one of the most secure locations possible, all access is strictly monitored and impervious to network breaches. While your credentials and personal details are kept safe, we also offer network validation with each account to ensure that a singular party cannot take full advantage of the digital assets. When a transaction is requested it will need to be validated by the network before it is processed. You can also look forward to state-of-the-art biometric technology that ensures only recognized users can make use of the crypto card.
Crypto card? You read that correctly, much like a credit card, our team has developed a biometric crypto card which will allow clients an unprecedented level of convenience while transacting with the best cryptocurrencies. This card comes with an eInk display to show any verification tokens on the spot. You could also connect it via a USB-C connection to your device or simply make use of it as you would a credit card. Our entire system here at Vaultavo ensures that all clients are kept safe and happy once their accounts are opened.
This brings us to a close of our overview of digital markets. The investment option has gained a fair amount of popularity over the last couple of decades and one can only expect that the trend will continue into the future. Always keep in mind the various types of digital markets whenever you consider investing in something new, you could trade for some NFTs or invest in a digital token that’s used in a metaverse. Both of which seem to behave relatively close to crypto markets and some outliers have even outperformed their predecessors.
Whether or not the market is worthwhile to you is entirely your own consideration. It provides a great opportunity for diversification but also has a high level of uncertainty in terms of value. You will also need to take into account the amount of time you are spending to hopefully gain some profits. Shop around for a trading partner instead of being hasty, their services have been carefully assembled to appeal to certain target markets and you will need to know if it’s a suitable fit. Finally, keep our storage service in mind while you are actively trading, this could the answer to your question of ‘why self custody crypt?’.
Digital Markets FAQs
What is an NFT?
If you’re involved with the best digital trading options, you’ve likely come across NFTs. They are fairly new to the scene when compared to standard cryptocurrencies but they have also proven their worth in a fairly short amount of time by utilizing blockchain security. A non fungible token (NFT) is a form of financial security and proves ownership of a certain digital asset by making use of blockchain technology. The most common of these being images made by artists that followers can purchase as an authentic product.
Can I invest in a metaverse?
Another online digital market option is a metaverse. This is simply defined as an online virtual reality and will usually coincide with a marketplace and variety of digital assets. Many metaverses have also incorporated their own digital tokens which are traded just as cryptocurrencies are with various crypto custody banks. If you’re interested in investing in a metaverse, you should visit the Vaultavo online trading academy to learn about all the necessary considerations. Head to our page now to find out more.
How much do I need to invest in digital markets?
This all depends on the market you are looking at investing in, there are numerous options and each of the digital assets will have their own asking price. When it comes to the metaverse, you would need to decide if you are simply investing in the company stock, if you’d like some of their digital tokens or if you’re trading your fiat currency for assets within the virtual realm. With all these factors, the entry amount is not exact but we do explore a variety of options here on our page.
Are digital assets safe?
Trading your hard-earned money for digital assets can be fairly daunting but thanks to blockchain technology, the ownership status of these assets are secure. If you buy an NFT, you can validate its authenticity and no one will be able to steal the verification method, unless they do the impossible and upset the digital ledger. Digital assets have become fairly similar to real assets and the only real risk is usually the user error of forgetting important keys or falling prey to scams.
Does any tax apply to digital markets?
Taxation laws will always depend on the region of residency. Some world leaders have outright banned cthe option to buy Bitcoin while others have embraced it. With digital markets, it’s a little bit more complicated. The variety of digital assets will likely have to be categorized and certain regulations established. Depending on what market you are looking to invest in, you might want to browse through our Academy pages to learn a bit more about cryptocurrency custody solutions and the regulations that might apply to your situation.