Review of Cryptocurrencies as Financial Assets

A cryptocurrency is a type of digital money used as a medium of exchange over a computer network that is not always backed and maintained by a country's central bank or government. Since the introduction of Bitcoin in 2009, hundreds of different “cryptocurrencies” have been created and accepted for a variety of transactions in top online marketplaces, the “sharing economy,” as well as more conventional retailers, producers, charities, and political organisations. This paper will take a thorough look at the qualities of cryptocurrencies as financial assets. We talk about how crypto generates value, as well as trading and information platforms. Then we look at crypto-currencies as alternative financial assets, looking at their returns and how they interact with bitcoin and each other. We assess their inclusion to investors' portfolios and demonstrate that, due to their small co-movements with existing assets as well as with each other, they can certainly improve portfolio diversity. In addition, we assess three pure crypto-currency portfolios: an equally weighted, a value-weighted, and one based on the CRIX. The CRIX portfolio has a lower risk than any of the tradable crypto-currencies individually. We also keep track of how the crypto-currency sector is evolving. A growth in market value is accompanied by increased liquidity, and a rising number of cryptos are contributing bigger sums to the total crypto market capitalization. (Determining the value, size, or quality of) Bitcoin's role and influence are the emphasis of this chapter. Techno-Indians are discussing, investing, and owning Bitcoin at a time when India is at its most technologically advanced in history. This article is the outcome of an investigation on the current and potential role of Bitcoin in the Indian economy (the process through which individuals make, trade, and purchase goods). New definitions argue that cryptocurrency is a replacement for fiat currency. The attention of legal/law-based entities is focused on cryptocurrencies because of the global interest in it (now under different control). In another country, it is seen as distinct and distinct. The status of bitcoin in India is now being tested/evaluated. As a result of this study, it is determined that bitcoin is neither a money or legal tender under Indian law, but rather a product that may be traded.