Has crypto become a real asset class?

Have cryptocurrency and/or cryptoassets become a proper asset class in the financial world? It's hard to answer. But, sitting at the end of the first 1/5th fo the 21st Century, it seems like crypto is on its way to becoming a real asset class if it's not already there. 

There isn't some special or sacred list in finance houses in London's financial district or on Wall St. in NYC that has a list of all asset classes - it doesn't work that way. What's considered a proper asset class and what's regarded as an alternative asset class (and further distinctions at various levels of granularity) is more based on collective consensus. 

Common consensus may make sense, but whose consensus are we talking about. Generally speaking, whether a financial instrument is considered a proper primary asset class (like stocks, bonds, and cash) is determined by the conglomeration of the following people's/org's opinions:

• senior executives in the wealth management industry
• senior executives in the trading industry, including propriety trading
• whether those that obtain services from the financial sector (for example, wealth management clients) know of crypto assets as a category and have a desire to hold them as part of their portfolios
• other senior financial industry executives, such as those in charge of risk management, payments clearing, etc. - these individuals may and will likely find uses for the distributed and immutable nature of many cryptocurrency ledgers
• the financial media, including big media to small personal finance blogs
• education institutions, including top MBA programs, economics departments, and Ph.D. programs

It's the interplay between individuals in each of the above categories that determine whether an asset class is going to be considered a core/primary asset class in the general conception. 

Another critical thing to think about is the size of the crypto market. The market cap of all cryptos can be viewed against the market cap of individuals asset classes and the entire finance industry as a whole. Questions like the following might be asked to understand better how big the overall crypto market is relative to all other finance-related markets:

• crypto market cap vs. total cash in the global economy
• crypto market cap vs. total market cap of various stock indices (e.g., Dow, S&P 500, FTSI, Nikkei, etc.)
• crypto market cap vs. market caps of different bond categories
• crypto market cap vs. gold (gold has been popular for comparison purposes because some say cryptocurrencies such as Bitcoin are becoming a form of digital gold)
• daily trading volume for crypto vs. trading volume of other key assets (including stocks, bonds, and FX)

Although there's no hard and fast way to determine whether anything is a core asset class definitely, crypto seems on its way to getting there. It seems likely that one day, gold will remain an alternative asset, but crypto will be a core part of most people's long term investing and retirement portfolios. One day, financial advisers may even find it imprudent to not include crypto as part of a proper diversified investing strategy.