Cryptocurrencies are a new and exciting technology with the potential to change the financial system as we know it. Nevertheless, there remains a lot of uncertainty regarding how they will be utilised in the future. 


What is cryptocurrency? 

A digital or virtual money that employs cryptography for security is called cryptocurrency. The term “crypto” refers to the numerous cryptographic methods that protect these entries, such as hashing, public-private key pairings, and elliptical curve encryption. 

Since cryptocurrencies are decentralised, neither a government nor a financial institution can control them. The earliest and best-known cryptocurrency, Bitcoin, was developed in 2009. On decentralised exchanges, cryptocurrency is often exchanged and may be used to make purchases of products and services. 

Understanding cryptocurrency 

Cryptocurrencies are powered by blockchain technology. Cryptocurrencies are powered by blockchain technology. Blockchain is a digital ledger of all of the cryptocurrency transactions. Blockchain technology is used to secure and track transactions. Bitcoin, for example, uses a blockchain to track and verify all transactions on the Bitcoin network.  

Popular cryptocurrencies include litecoin, bitcoin, monero and ether. Cryptographic methods, which are maintained and verified through a process called mining, a network of computers or specialised hardware, such as application-specific integrated circuits (ASICs), process and validate the transactions, and cryptocurrencies are generated (and secured). The procedure rewards the miners who power the Bitcoin network. 

Cryptocurrency assets are often volatile, meaning their prices can fluctuate dramatically. This volatility can make cryptocurrencies a risky investment. However, some believe the volatility will decrease as the market matures. 

Types of cryptocurrency 


Knowing the different kinds of cryptocurrencies is important, as so many are available nowadays. Knowing if the coin you’re considering serves a purpose will help you evaluate whether investing in it is worthwhile; a cryptocurrency without a use case is riskier than one with one. 

Typically, the coin’s name is included while discussing different cryptocurrency varieties. But coin kinds and coin names are different. The following are some of the categories of tokens you could encounter, along with their names: 

  • Utility 

Tokens with this feature include XRP and ETH. On their blockchains, they perform certain roles. 

  • Governance 

These tokens on a blockchain like Uniswap reflect voting or other privileges. 

  • Transactional 

Tokens made to be used as a form of payment. Of these, Bitcoin is the most well-known. 

  • Platform 

These tokens serve programs designed to work with a blockchain like Solana. 

  • Security tokens  

Tokens that reflect ownership of an asset, such as a tokenized stock, are known as security tokens (value transferred to the blockchain). A securitized token is the MS Token, for instance. The Millennium Sapphire may be partially acquired if you can locate one for sale. 

Cryptocurrency – how it is produced 

Blockchain, a decentralised public ledger updated and maintained by currency holders, is the technology that underlies cryptocurrencies. 

The process of “mining,” employing computers’ power to solve challenging mathematical problems to produce coins, is how cryptocurrency units are produced. Additionally, users may purchase the currency from brokers, keep them in encrypted wallets, and then use them to make purchases. 

Cryptocurrency ownership entails the lack of any material possessions. What you hold is a key that permits you to move information or a unit of measurement from one person to another without the aid of a trustworthy third party. 

Examples cryptocurrency 

Examples of cryptocurrencies include: 

  • Bitcoin 

Bitcoin, the first and most prominent cryptocurrency, was created in 2009. The currency’s creator is commonly thought to be Satoshi Nakamoto, an alias for a person or team whose exact identity is still unknown. 

  • Ethereum 

Ethereum, another popular cryptocurrency, was created in 2015. Ethereum differs from Bitcoin in that it allows for smart contracts or contracts that can be executed automatically according to certain conditions.  

  • Litecoin 

Litecoin, another popular cryptocurrency, was created in 2011. In many aspects, Litecoin and Bitcoin are similar, but it is designed to be faster and cheaper to transact.  

  • Bitcoin cash 

It is a fork of Bitcoin, created in 2017. Bitcoin Cash is similar to Bitcoin but has a larger block size, meaning it can process more transactions per second. 

Frequently Asked Questions

Generally, use these easy steps to purchase cryptocurrency: 

  • Select a broker or cryptocurrency exchange 
  • Register for an account and verify it 
  • Deposit money to invest 
  • Place your order for cryptocurrency 
  • Pick a storage approach 

You may purchase cryptocurrencies using alternative methods, such as:  

  • Crypto Exchange-Traded Funds (ETFs) 
  • Purchasing stocks in organisations related to cryptocurrency 

It is important to consider if the popularity that cryptocurrencies have achieved over time is real. Cryptocurrency, particularly Bitcoin, has, even though it is still far from replacing institutionalised cash, gained widespread acceptability worldwide. 

They can be used as a mode of payment. Bitcoin was initially of limited value as a method of payment to retailers. But over time, many businesses, including eateries, airlines, jewellers, and apps, have begun to recognise it as a legitimate form of payment. 

Additionally, cryptocurrencies, particularly Bitcoin, are among the most profitable investment opportunities available. Its value growth is dynamic and may be a great route for capital growth. 

The price of cryptocurrencies is highly volatile and can change rapidly. Governments or financial institutions do not regulate cryptocurrencies, so their value is determined by supply and demand on the open market. The price of a cryptocurrency is also influenced by factors such as media coverage, public interest, and even rumours. 


Bitcoins are kept in a digital wallet, just like we store credit cards or cash in a physical wallet. Digital wallets can be web-based or hardware-based. The wallet can be stored on a desktop computer or mobile device or kept secure by writing the private keys and access addresses on paper. 

Some of the safest methods to keep cryptocurrency are in custodial and hardware wallets, but each has benefits and limitations. 


For certain companies, the use of cryptocurrencies may present opportunities. The advantages might include the following: 

  • A crypto transaction often happens quickly. For instance, only a computer or smartphone is required to move Bitcoins from one digital wallet to another. 
  • Cheaper and quicker money transactions and decentralised networks that do not have a sole point of failure are two benefits of cryptocurrencies.  
  • Blockchain seeks to eliminate middlemen like banks and internet marketplaces, so there are no transaction costs. 
  • Payments made using cryptocurrencies are becoming more common among big businesses and industries like fashion and medicine. 

Cryptocurrencies’ drawbacks include their unstable prices, high energy requirements for mining, and usage in illegal activities. Additionally, cyber attacks often target cryptocurrency exchanges, which might mean that you permanently lose your investments. 

Related Terms

    Read the Latest Market Journal

    Weekly Updates 26/2/24 – 1/3/24

    Published on Feb 28, 2024 52 

    This weekly update is designed to help you stay informed and relate economic and company...

    All-in-One Guide to Investing in China via ETFs

    Published on Feb 27, 2024 292 

    Start trading on POEMS! Open a free account here! Why China? In the vast landscape...

    Navigating the Post-Inflation Landscape in 2024: Top 10 US Markets Key Events to Look out for

    Published on Feb 23, 2024 323 

    Start trading on POEMS! Open a free account here! In 2023, the United States experienced...

    From Boom to Bust: Lessons from the Barings Bank Collapse

    Published on Feb 23, 2024 60 

    Barings Bank was one of the oldest merchant banks in England with a long history...

    Decoding FX CFD 2.0

    Published on Feb 20, 2024 66 

    This article is aimed at availing information and knowledge essential to intermediate forex traders. It...

    Weekly Updates 19/2/24 – 23/2/24

    Published on Feb 19, 2024 89 

    This weekly update is designed to help you stay informed and relate economic and company...

    Unlock Prosperity with 5 Sure-Fire Financial Instruments!

    Published on Feb 14, 2024 197 

    In Singapore, the concept of guaranteed returns may evoke the spirit of prosperity, reminiscent perhaps...

    Weekly Updates 12/2/24 –16/2/24

    Published on Feb 13, 2024 70 

    This weekly update is designed to help you stay informed and relate economic and company...

    Contact us to Open an Account

    Need Assistance? Share your Details and we’ll get back to you


    This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

    An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

    Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

    Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

    The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <> for more information in relation to the dividend distributions.  

    The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

    The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

    This advertisement has not been reviewed by the Monetary Authority of Singapore.  


    Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
    250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
    Tel: (65) 6230 8133 Fax: (65) 65383066