Crypto x cryptocurrency: know the differences between each one and how they work in practice

With technological advancement in the global financial market, crypto assets and cryptocurrencies are increasingly helping companies and economies to enter the digital world.However, many people still confuse these two concepts, which, although related, bring important differences. 

“The two solutions are linked to the new era of decentralization of transactions and investments, but not necessarily one is the same as the other, especially when we look at the possibilities of” applications, says the CEO of Pinbank, one-stop-bank-provider with a complete ecosystem of financial solutions, Felipe Negri.

Main characteristics

Basically, a crypto asset is a crypto-protected digital asset. Among the options in this category are cryptocurrencies, but there are also alternatives such as NFTs (the acronym for “Non-Fungible”), stablecoins and utility tokens.

When we talk only about crypto assets, we are discussing a more abstract idea, because they do not depend on fiat currencies to determine their” value, says Negri.“Ou that is, they are assets that follow the market in a totally disconnected way from a government model or a specific strategy, depending much more on supply and demand”, he adds.

Cryptocurrencies have a value backed by real currencies, which, in turn, bring processes guaranteed by governments. One of the main examples is BTC (Bitcoin); according to CoinMarketCap, this even exceeded the price of US$ 85 thousand in mid-April and increasingly becomes an option accepted by different investors and organizations.

“In the case of cryptocurrencies, which are backed by natural currencies, the offer does not happen in a disconnected way”, explains the CEO of Pinbank.“For this reason, there is a movement of the market as a whole to embrace this cryptoactive, since it is a solution to uncomplicate and optimize payments and transfers around the world”, he adds.

Evolution in Brazil

In Brazil, the crypto market is heated, which can be identified by the performance of cryptocurrencies.Income data reinforces this reality by revealing that these assets moved about R$ 248 billion between January and September 2024.  

On the other hand, Negri points out that there is a great challenge in the country to make the use of these alternatives clearer.“New technologies always need to be applied to solve pain, which in this case refer to the prevention of financial risks.This means that both governments need to educate the population on the subject and accelerate their regulations, as companies must create services to reduce rates and improve the experiences of users”.

The executive also emphasizes that the development of the crypto segment can contribute to Brazil facing the fiscal “CAos”.“Searching to face the volatility of the exchange through innovation is an efficient way to improve commercial operations and even investment strategies, without being at the mercy of global economic uncertainties. That is, the market has a much greater chance of achieving sustainable growth with the digitization of” processes, he concludes.