What are digital assets? A guide for financial advisors

Digital Assets refer to a broad class of assets that exist entirely in digital form and can be bought, sold, and stored online. Enabled by technologies such as blockchain, these assets allow ownership and value to be recorded and transferred without relying on traditional financial infrastructure.

The universe of digital assets includes cryptocurrencies, non-fungible tokens (NFTs), and tokenized versions of real-world assets, from securities to real estate. While these instruments differ significantly in purpose and design, they are increasingly becoming integrated with mainstream finance and investor portfolios.

As digital assets become more common in markets and client conversations, financial advisors need a clear framework for understanding what they are, how they work, and what their emergence could mean for portfolio construction and long-term investment strategy.

What is a digital asset?

Our financial lives, including online payments and recordkeeping, have become increasingly digital in recent years. The rise of digital assets—assets that can be owned, transferred, and stored electronically—is part of this trend.

Cryptocurrencies are the most visible example. Since the creation of Bitcoin in 2009, cryptocurrencies have grown from a niche experiment into a global market with a total capitalization of nearly $3 trillion as of Q4 2025. While volatility remains a defining feature of cryptocurrency, investor interest in these assets has grown significantly in recent years.

The digital asset universe is expanding beyond cryptocurrencies as well. NFTs and digital art have introduced new ways to trade unique digital items. Tokenization is extending this concept further, enabling real-world assets—such as real estate, money market funds, or other securities—to be represented and transferred digitally, potentially improving accessibility and efficiency.

In the coming years, digital assets and the technologies that support them are poised to play a larger role in the financial industry. Institutional adoption is accelerating, signaling a shift from experimentation toward integration. In 2025, more than half of traditional hedge funds (55%) reported exposure to digital assets, up from 47% in 2024, according to a survey by the Alternative Investment Management Association (AIMA). 

How do digital assets compare to traditional assets?

A digital asset is any item of value that exists in a digital format and can be owned, traded, or stored online.

Digital assets vs. traditional assets

What types of digital assets are there?

Digital assets include many different types of assets. They include:

Cryptocurrencies and digital currency assets

Cryptocurrencies are probably the best-known type of digital asset. Used for payments, investment, or network utility, there are thousands of different cryptocurrencies. Some of the most popular include:

• Bitcoin
• Ethereum
• Tether
• Solana

Non-fungible tokens

NFTs are unique digital items representing ownership of art, music, or virtual goods. Unlike cryptocurrencies, which are interchangeable with one another, each NFT is distinct and cannot be exchanged on a one-to-one basis, a feature that allows them to function as proof of ownership for individual digital items. NFTs are typically created and transacted on blockchain platforms such as Ethereum, which record ownership and transaction history on a public, tamper-resistant ledger.

Tokenized assets

The digital asset landscape also includes assets such as domain names, datasets, and forms of intellectual property. These assets derive value from their utility, scarcity, or legal rights, even though they exist entirely in digital form. As commerce continues to move online, these lesser-known digital assets are becoming an increasingly important part of the digital economy.

Other digital assets

The digital asset landscape also includes assets such as domain names, datasets, and forms of intellectual property. These assets derive value from their utility, scarcity, or legal rights, even though they exist entirely in digital form. As commerce continues to move online, these lesser-known digital assets are becoming an increasingly important part of the digital economy.

Exchange-traded products

While not digital assets themselves, exchange-traded products (ETPs) provide investors with a familiar way to gain exposure to digital assets through traditional market infrastructure. These vehicles, which include exchange-traded funds (ETFs) and exchange-traded notes (ETNs), trade on public exchanges and can track the price of a single cryptocurrency or a basket of digital assets.