Guide to Fungibility and Non-Fungibility

By Brian Nibley · September 02, 2022 · 9 minute read

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Guide to Fungibility and Non-Fungibility

A fungible asset is interchangeable and indistinguishable from another asset of the same type. For example, units of the same currency are fungible: One U.S. dollar can be exchanged for another dollar (or four quarters, or 20 nickels), and each of those dollars can be used to make a purchase.

Crude oil is fungible, as one barrel is as good as the next, and can be used for the same purposes.

In finance, being able to understand and define fungible, and what constitutes fungible vs. non-fungible assets is important.

What Is Fungibility?

How do you define fungible? Fungible’s meaning boils down to “the ability to be copied or replicated, and thus, interchangeable.” That means that fungible assets, such as the aforementioned U.S. dollar, have equal value to other dollars. Again, one U.S. dollar is interchangeable with any other U.S. dollar or its composite parts (pennies, nickels, dimes, etc.).

So, one definition of fungibility would be units that are effectively identical in terms of their attributes such that one can be exchanged for the other with no loss of value.

Most of the types of assets traded in online brokerage accounts are fungible. Stocks, bonds, and options contracts are considered fungible assets. These assets are interchangeable with the assets of other investors; a share of Company A’s stock in one investor’s portfolio, for example, is identical or indistinguishable from a share in another investor’s portfolio.

The same holds true for options contracts. A contract for the same security with an identical strike price and expiry date will have the same value as another contract of its kind.

Fungible vs Non-Fungible

Looking at assets that are not fungible (or non-fungible) can also be helpful to understanding fungibility’s definition.

Many tracts of land or real estate are not fungible because no two are exactly alike — an acre of farmland in California is not the same as an acre of desert in Nevada.

Basketball cards are also non-fungible because they have different attributes and have unequal values, depending on a variety of factors such as age, condition, and rarity.

There may be two copies of the same basketball card, however, but depending on the condition of the cards, the two may have different values. That gives us a non-fungible definition: Items that do not possess the same value and therefore cannot be copied or exchanged for another of its type.

Examples of Fungible Goods

Fungible goods include fiat currencies and financial assets, like stocks. Many commodities and precious metals are also fungible. A pound of wheat, soy beans, or corn would be exchangeable for another pound of the same goods in most cases, assuming equal condition, age, and type. Similarly, a barrel of oil generally has the same value as any other barrel of oil, and can fetch the same price. Here is some more detail about some key fungible asset types:


An ounce of gold is generally worth the same as any other ounce of gold, with some exceptions. And gold is an interesting example because it demonstrates how thin the line between being fungible and non-fungible actually is.

Gold bullion — or, officially recognized pieces of gold having at least 99.5% purity — is typically fungible. A standard gold “round,” which is similar to a coin, but is not minted by a government, should have the same value anywhere in the world, and be worth almost exactly the same as any other round.

Actual gold coins can be different, however, as they may have different values, even if two coins both contain the same amount of gold. For instance, a rare, one-ounce gold coin from a historic shipwreck that took place in the 16th century might be worth much more than a new, one-ounce Gold American Eagle coin minted this year.

Sometimes, even gold bars that have all the same physical properties might not be fungible. The Federal Reserve Bank of New York, for example, holds gold bars for various governments around the world. Upon deposit, the bars are carefully inspected and weighed to meet certain specifications. The process is recorded (serial numbers may be written down, for instance), and countries deposit their gold with the expectation that they will be able to later withdraw the exact same bars — not the gold bars deposited by a different country.

As such, the specific gold bars stored at the Federal Reserve’s vault are not fungible.

💡 Recommended: Investing in Gold and Other Precious Metals

Fiat Currencies

Fiat currencies — or currency that is created and issued by a government — is also a fungible asset. As mentioned, you could exchange a one dollar bill for any other dollar bill, because they are valued the same, and there is no difference between the two in the eyes of a banker or cashier. But again, the currency has to be of the same type, as one U.S. dollar is not interchangeable with one Euro, for example.

Stocks and Financial Assets

Stocks do sometimes come in different variations, but more often than not, one share of a stock is going to be the same as any other share — that goes for other financial assets, too, like bonds or options contracts. There’s nothing that distinguishes the shares of Company A’s stock in your portfolio from the Company A shares in your friend’s portfolio, in other words.

Note, though, that shares of a Class A stock and a Class B stock in the same company would not be fungible, since they have different values and attributes.


While each Bitcoin is unique in a technical sense, it is typically considered a fungible asset, as they’re valued the same and one BTC or altcoin is mostly indistinguishable from another. Since Bitcoin transactions are public, because they’re recorded on a blockchain, coins that have been used in criminal activity in the past could possibly be identified and deemed undesirable.

But if transactions were private rather than public? Then, in theory, all Bitcoins would be fungible, because there would be no way to distinguish them from each other. When you pay for something with cash, the transaction is fungible because the cashier can’t tell your dollars apart from anyone else’s dollars.

While some cryptocurrencies are fungible assets, other digital assets, such as non-fungible tokens (NFTs) are generally not — more on that below.

💡 Recommended: How to Invest in Bitcoin 101

Examples of Non-Fungible Assets

To recap, you can define fungible as assets that can be replicated, to some degree, and non-fungible assets are those that cannot — they are one-of-a-kind assets. As a result, they’re generally rare, and carry a lot of value. Here are some examples of non-fungible assets:


Pieces of art are almost always one-off creations. There’s only one Mona Lisa, for instance, and even though you can buy a print of the painting, the print is not the painting itself, which is why it has far lower value.

Art can be recreated, to an extent, too, but there will always be one original piece, be it a painting or a sculpture, from which replicas draw their inspiration. It’s the rarity of pieces of art that make many of them so valuable.


Collectibles come in all shapes and forms, from sports memorabilia to fossilized dinosaur bones. If you own a rare sports collectible, like a baseball bat that was used by Babe Ruth, it’s non-fungible — it cannot be copied or replicated, or exchanged for another of a similar type. There may be other bats out there, but none carry the history of the one that you own.

Real Estate

Real estate may be the ultimate non-fungible asset. No two pieces of real estate or property are exactly the same, and more cannot be created. Each property is unique, and there’s no way to create copies — or exchange one property for another.

Non-Fungible Tokens

Non-fungible tokens, or NFTs, are yet another type of non-fungible asset. NFTs are just that: crypto tokens. These tokens often take the form of pieces of digital artwork that have been assigned specific pieces of code or data to ensure they can’t be copied, and effectively, remain non-fungible. They’re wholly unique, and different from every other non-fungible token out there.

While many people are familiar with NFTs as being associated with digital artwork, they can be used in many other ways too, including tokenizing pieces of music, and even information such as medical records.

Fungible vs Liquid Assets

An asset’s fungibility and its liquidity are two different things; fungibility refers to its ability to be copied or exchanged, and its liquidity refers to how easily it can be traded or exchanged. Some fungible assets are liquid, and some are not — conversely, some non-fungible assets are liquid, and some are not.

For example, consider a non-fungible asset, like real estate. A piece of land is non-fungible, but it’s also illiquid, in that it takes a long time to exchange it for something else (usually money). But for non-fungible assets like in-demand NFTs? Selling NFTs or other non-fungible assets can happen very quickly, making it non-fungible and highly liquid.

As such, there is not a strong relationship between fungibility and liquidity. It depends on the specific asset.

Arbitrage: A Benefit of Fungible Investments

One benefit of fungible investments is that astute investors can profit from something called arbitrage, which refers to the potential to profit from differences in price across multiple trading platforms.

For example, imagine a stock listed on both the Netherlands and German stock exchanges. Both countries use the Euro. If the stock were trading for 5 Euros in the Netherlands and 5.25 Euros in Germany, traders could buy shares from the Netherlands exchange and sell them on the German exchange. Then, they could keep the profit of 0.25 Euros per share.

Fungible stocks priced in different currencies can also have arbitrage opportunities. Because of fluctuating exchange rates, calculating the different prices would amount to an added layer of complexity. But the profit margins can be even, potentially, since there may be gains in both the arbitrage and the currency conversion, if both were favorable. Investors can also sometimes purchase futures contracts for fungible assets, based on your expectation of how its price will change in the future.

The Takeaway

Fungible assets are indistinguishable from, and can be exchanged for others of the same type — they can, in effect, be copied or reproduced. Non-fungible assets, on the other hand, are one-of-a-kind, or non-replicable. However, some assets can be both; Bitcoin and gold are two good examples of assets that can be fungible or non-fungible, depending on the circumstances.

Further, fungible assets can present arbitrage opportunities for astute traders. This is more of an advanced strategy, requiring awareness of multiple markets, and typically needs to take place at scale in order to generate a significant profit.

If you’re ready to start trading fungible and non-fungible assets, you can get started by opening an Active Invest account with the SoFi Invest stock trading platform, which allows new and experienced traders alike to trade stocks and exchange-traded funds (ETFs).


What are some fungible things?

Fungible things, or fungible assets, are items or goods that can be exchanged because they are effectively identical and carry the same value. Examples would include U.S. dollar bills, basketballs, a barrel of oil, and most stocks or bonds.

What does fungible mean in finance?

Fungible refers to goods or items that are interchangeable and indistinguishable from other assets of the same type. If one item can be exchanged for another and retain the same value, it’s fungible.

What are some non-fungible assets?

Examples of non-fungible assets include non-fungible tokens (NFTs), real estate, artwork, and certain collectibles, such as fossils or sports memorabilia.

Photo credit: iStock/ferrantraite

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