The cryptocurrency market is a modern financial market. Traders have transparent and advanced technology to invest in. In addition, blockchain and cryptography make trading more relevant to earning profits. 

Keeping these points in mind, several traders invest in crypto assets. There are many types of crypto assets available for traders. We'll analyse the cryptoassets and their types through the article. 

So, let's understand crypto assets and what are the types of crypto assets. 

What are Cryptoassets?

Cryptoassets are the digital representation of the value traders can transfer, store or trade electronically. It is a digital asset that traders invest in to earn profits. Besides, they can use it to make payments online. 

The assets can be of various types. However, many think of Bitcoin when we hear the word cryptoassets. 

Traders should understand that the cryptocurrency market is not one single digital coin. Instead, there are non-fungible tokens, altcoins and various other tokens. 

The cryptoassets are a subset of the digital assets. It uses cryptography and blockchain technology to protect users. In addition, these maintain a distributed ledger to record all transactions for transparent trading. 

Types of Cryptoassets

Many market traders think of cryptoassets to be digital coins only. However, this is not true. Cryptoassets have various types that traders can choose to trade. Therefore, traders need to think beyond Bitcoin and make their trading fun. 

Below are the types of cryptoassets that traders can select from: 

Payment Currencies

Payment currencies are the primary cryptocurrency. Examples of such digital currencies are Bitcoin, Ethereum and Litecoin. Traders can use them to make payments online. 

The payment currencies use blockchain technology for encryption, regulation and verification of the transfer of funds. It is between two trading parties that the transfer takes place. 

Several cryptos have technical use in making payments. In addition, traders can use them to buy goods and services. 

Privacy Coins

Privacy coins have an extra layer of encryption to keep transactional information a secret. It is different from the payment currencies. The owner of privacy coins can have anonymous ownership. 

The wallet address balance of the traders is private. In addition, the amount sent and received in the transactions is only by the sender and the receiver. 

Dash is an excellent example of privacy coins. 

Utility Tokens

Utility tokens are for designated purposes. The coins are within the blockchain economy. Many utility tokens are ERC-20 tokens like the 0x (ZRX) and the Basic attention token (BAT). 

The ERC-20 token runs on the Ethereum network. The crypto asset deems a utility token when it does not qualify for the Howey test. The test determines whether the transaction is an investment contract or not. 

Stablecoins

Stablecoins are a popular cryptoasset. This is because the price of the cryptoasset is stable, which attracts several traders—the coins peg around another asset class to reduce the market volatility. 

Examples of stablecoins are Dogecoin, DAI and Tether. 

Non-Fungible Tokens (NFTs)

NFTs are the cryptoassets that derive their value from rarity. Also known as the collectables, NFTs mine using Ethereum's ERC-721 standard. The NFTs are in different shapes and sizes. 

Traders can invest in unique cryptoassets ranging from perfumes to people's tweets. 

Also Read: How to invest in metaverse in India?

Decentralised Finance (DeFi)

Decentralised finance is an emerging financial technology. It is based on a secure distributed ledger similar to cryptocurrencies. The DeFi are available to remove the central intermediaries like banks and financial institutions. 

Examples of DeFi coins are Uniswap, Aave, Compound and Loopring. 

Blockchain Economies

Blockchain economies are the platforms that have the advanced functions of blockchain technology besides payment. Ethereum and Cardano are great examples of blockchain economies. 

On the Ethereum coin, traders can create decentralised tokens. In contrast, Cardano offers more sustainable, scalable and interoperability platforms. 

Security Tokens

The crypto assets that pass the Howey test are the security tokens. The tokens represent a stake in the blockchain project. In addition, these tokens come with a reasonable future profit expectation. 

An example of a security token is Blockchain Capital (BCAP). 

Conclusion 

Cryptoassets are the financial coins that traders can invest in getting good returns. The article focuses on explaining different types of cryptoassets. For example, a trader searching for coins that offer payment can invest in payment currencies. 

In contrast, traders having an interest in coins that have fewer fluctuations can choose from stablecoins. Besides, there are NFTs, DeFi, Blockchain and security tokens. Do you know how to use forex factory trading tools?

Traders can overview them and get the best for their crypto trade.