The crypto lifestyle of the future



While the financial world remains divided over crypto currency and assets, digital assets exchange Zipmex’s chief marketing officer Proud Limpongpan highlights their real-world applicability that could soon be the norm.
While crypto assets are rising in popularity globally, sceptics doubt their real-world value and utility. Policymakers worldwide, in spite of increased pressure, remain cautious in their approach to regulation. With such barriers to accepting crypto assets, it is still a popular notion to view crypto assets as speculative assets for risk-seeking traders.
Despite these roadblocks, crypto assets hold high potential to become an integral part of our day-to-day life. Granted, the crypto assets industry is still in its infancy, but the demand for crypto assets across multiple sectors continues to grow. According to Chainalysis index, the global number of crypto wallet holders has increased by 45 per cent since the start of the pandemic, to an estimated 66 million users. There are now several notable use cases for crypto assets that many users can take advantage of.
Firstly, Decentralized Finance, better known as DeFi, is a blockchain-based alternative to the traditional financial system that requires no intermediaries such as banks and other financial institutions. At its core, DeFi allows individuals to use their crypto assets in all manner of financial transactions the same way they would physical assets. Examples of DeFi activities include using crypto asset holdings as collateral for no-fixed-term loans and earning fees for providing the liquidity that facilitates trading. With the popularity of DeFi services exponentially growing, the total value locked (TVL) has increased from US$20 billion to US$101 billion in the past year alone. The opportunities for yield will only continue to expand.
Another use case is payments, which has started to gain momentum as an alternative to fiat currencies. Prominent payment technology leaders such as Mastercard, PayPal and Visa have incorporated crypto assets into their networks. PayPal allows merchants to accept payment in crypto assets, while Visa and Mastercard have partnered with fintech companies offering crypto debit cards. Jumping on the crypto payments bandwagon, other sectors such as retail and consumer goods are following in the payment sector’s footsteps – Starbucks, Crate & Barrel, Nordstrom, and more, now accept crypto assets to pay for their goods via third-party apps.
The gaming entertainment industry has also embraced the use of crypto assets. The blockchain-based online game Axie Infinity, which requires non-fungible tokens (NFTs) to play and rewards users with crypto assets, has reached over 1.85 million daily active players as of October 2021. Leveraging “Play-To-Earn” business models, many blockchain games enable users to earn through the creation of their own economies comprising NFT marketplaces, in-game digital assets and native crypto assets.
Yet the rise of NFTs is not limited to just gaming. NFTs have become a prominent part of the fashion, sports and art worlds. Although it is speculated that the NFT market may be a bubble, the demand for digital art and collectibles represented by NFTs has continuously boomed over the last year. In the world of high fashion, Italian fashion house Gucci launched its first-ever NFT film with Christie’s, based on its Aria collection. Luxury brand Burberry announced its partnership with Mythical Games to launch its NFT collection for the multi-player party game Blankos Block Party. In competitive sports, NBA Top Shot, which issues NFTs representing video highlights, has seen hundreds of millions of dollars in purchases and trades.
Lastly, crypto assets have also become a critical component to blockchain-based metaverses such as Decentraland, a virtual metaverse that facilitates everything from ownership, identity, payments and voting. As part of its rebranding and pivot towards a metaverse-drive future, Meta says it will allow NFTs in its metaverse projects. Even prestigious auction house Sotheby’s recently entered the Decentraland metaverse by hosting a digital art NFT auction inside a virtual replica of its London galleries.
We have also seen crypto assets, Bitcoin and Ether in particular, gain broader acceptance as legitimate financial instruments for institutional investors. Funds such as MicroStrategy continue to grow their bitcoin positions, while a bitcoin exchange-traded fund (ETF) was recently launched that is already nearing the upper limit for futures contracts. Recent discussions suggest an ether ETF is on its way next year, paving the way for even more derivatives.
Countries are also starting to jump on board. El Salvador recently added bitcoin as one of its legal tenders. It also invested in bitcoin, the proceeds from which are now being allocated to build schools. Other countries are actively testing the feasibility of central-bank-issued crypto fiat currencies. China, in particular, is leading the way having already created pilot zones for testing its crypto renminbi.
Big Tech, never far behind, is making headway in the space. Amazon, beyond the impending launch of its own native crypto assets, has plans to build out its suite of crypto asset services on its cloud services platform, Amazon Web Services. Meta, meanwhile, has launched a pilot version of its crypto asset wallet, Novi, in a move thought to be a precursor to the wider launch of its stablecoin Diem (formerly Libra).
Regulation, however, remains a work in progress. Some governments have been hesitant to commit one way or the other, unsure of the potential impact of crypto assets, while others have considered outright bans. The pressure is building to enact regulations that will both encourage innovation and protect investors.
Nevertheless, if the past five years are any indication, we are looking at a bright future. Crypto assets may have its detractors, but it will soon become part of a lifestyle and not just an alternative way of investing.
This story first appeared in the December 2021 issue of Prestige Singapore. 



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