The Secret Life of Digital Assets

Tuesday, February 15, 2022 2:57 pm
Reading Time: 2 minutes

Have you bought any digital assets? Do you consider digital assets investments?

It is all over the internet, digital assets are the fad now! Everyone one is making and buying them. Should you join in the fun? If you have already made a purchase, what are some of the things that you should be aware of? Elson Goh, from EG Financial Services, joined Mike to discuss if digital assets and if they should be included in our investment portfolio.

A Perth school teacher bought a penthouse in the Metaverse for $1000. You can buy basketball digital highlight for $200 000 3 sec clip of scoring a goal. Investment is the purchase of future cash goal from a productive asset – something physical you can derive a cash flow from.

Investment is the purchase of future cash flow from a productive asset. Speculating is purchase of an asset hoping that it would go up in value. Making a profit does not mean you are investing. Currency, digital or not does not produce anything. Shares and properties increase in value because of increased cash flow. “That’s because the marginal cost to produce a digital parcel of land is almost nothing, and its value is more closely related to its perceived scarcity than to its actual utility.” Although people believe asset prices are related to their utility, in reality asset values are determined by two factors: collective belief and transferability.

“There’s just two things they have to do: 1. Create something and number 2. Convince us that we need it… The only thing they’re selling you is the Fear of Missing Out (FOMO)”

Let us know your thoughts or questions by texting or messaging us on socials. Listen to the full chat below!

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