3 reasons why crypto-currencies are nothing more than a digital asset

Many people idealize crypto-currencies by assigning them too high a status. HODLers are selling houses and borrowing money to buy bitcoins in hopes of becoming rich by 2022. While the idea behind Bitcoin, Ethereum, IOTA, XTZ, and many other coins and tokens is great, and the world of digital currencies will likely continue to grow, pushing blockchain technology to evolve, high hopes and expectations should be weighted accordingly. Below is a list of three reasons why a crypto-currency is nothing more than a digital asset.

First fact about crypto-currencies: institutions are trading crypto-currencies

Have you wondered why the price of bitcoin is rising? Institutions are trading crypto-currencies. The process is described in the same way it appears in the stock and commodity markets. The big players in the industry determine the outcome. There is very little influence that comes from the average Joes, the crypto-currency enthusiasts. Wall Street is running the game.

Crypto-currency fact 2: Banks are using crypto-currencies.

If you got stuck in 2017 and still think it's a "banks vs. crypto" game, wake up. Distributed ledgers are now being actively used by financial institutions. JPMorgan and Goldman Sachs have their coins being used for "liquidity on demand" purposes.

Crypto-currency fact 3: Governments control crypto-currencies

In the beginning, crypto-currencies attracted early adopters by offering a certain level of independence. Many people saw digital currencies as a unique way to have control over their own money. Today's reality is a far cry from the original concept proposed by Satoshi.

First of all, crypto-currencies are illiquid. You can't buy groceries with a crypto. Digital coins are stores of value, not digital cash. You still have to exchange crypto-currencies for fiat currency in order to purchase a product or service. In addition, all service providers that exchange digital coins for cash are monitored by the government. In the United States, the IRS knows precisely how much money you make from crypto-currencies.