Which of the following statements about synthetic assets is true?

Synthetic assets are financial instruments that derive their value from an underlying asset but don't require the holder to actually own that asset. Instead, they allow individuals to gain exposure to the price movements of the underlying asset without possessing it. This is particularly useful for investors who want to speculate on the performance of various assets, like stocks, commodities, or cryptocurrencies, without needing to deal with the physical asset itself.

For instance, in the cryptocurrency world, synthetic assets can replicate the value of Bitcoin or other currencies on a blockchain platform using smart contracts. This approach not only streamlines trading but also makes it easier to gain exposure to different markets.

Regarding the other statements, synthetic assets do not necessitate physical ownership of the underlying asset, they are not universally regulated by government bodies, and they can be created using various forms of collateral or assets, not solely stablecoins. The flexibility in the creation and trading of synthetic assets is one of their defining features, setting them apart from traditional assets.