Del Wang, the Co-Founder and CEO of Babel Finance, is confident in the growth of cryptocurrency, and the increasing mainstream adoption of cryptocurrencies will create a market even bigger than gold.
Del Wang and the Babel Finance crypto team in Hong Kong and Singapore know that the latest funding round sets an upward trajectory in the perception of crypto and other tokens with institutional investors.
Impact of the Ukraine war
As the Ukraine war continues, Del Wang believes that the growing uncertainty will drive investors to seek assets that might help mitigate sovereign risk, including Bitcoin. As it becomes more popular in 2022, Bitcoin will continue to grow as demand rises and supply declines, with occasional corrections predicted.
In addition, according to Del Wang and Babel Finance's crypto research team, some clear trends are emerging in the volatile crypto market.
First, the rising status of crypto assets
At the macro level, order and chaos go back and forth. Every out-of-order fiat currency credit reconstruction corresponds to a new anchor.
At the beginning, it was grain, then it moved to gold, and now along to Bitcoin. Bitcoin has the risk-aversion attribute in the next period and has the opportunity to become a strategic deployment resource for some important countries.
In the future, the market value of crypto may also far exceed gold, and the total size of the crypto asset market might be 3-5 times that of today in three years, Del Wang believes.
Aside from the current chaos like the Ukraine crisis, technological innovation and celebrity endorsements significantly impacting the mainstream adoption of Bitcoin and crypto among institutional investors, concerned investors are also looking for new options for higher-yielding investments because of liquidity issues during the Covid epidemic.
Second, institutionalization is dominating the crypto space
Previously, Bitcoin price was inextricably linked to the retail sector's speculative game between buyers and sellers. By 2021, Bitcoin's pricing power has shifted to institutions with different asset allocation requirements, including conventional financial institutions and tech titans joining the market with new technology.
Furthermore, according to Del Wang, the crypto industry's development route will undoubtedly duplicate traditional finance, retaining the same development roadmap.
There will be more players as the crypto economy evolves. At the same time, its infrastructure and security will strengthen and grow. Many of the high-risk and unstable DeFi businesses will become more reliable and ubiquitous in the future.
Finally, at least at the transaction level, crypto firms may supplant exchanges' basic position. There will be prime brokerage, which first serves institutions by offering professional banking services such as basic deposit and loan products, derivatives that may hedge risks, and inter-institutional financial instruments.
Del Wang's crypto team is seeing a surge in demand for customized crypto-asset financial solutions with traditional finance features for institutional and high-net-worth customers. He believes that in the future, more diverse products, including ETFs and mutual funds and crypto asset management, will embrace the new wave of prospects.
"The transition to trade via crypto tokens is likely to be inevitable in a fast-growing digital world. While the Fed's liquidity restriction will affect asset values, the rising crypto dollar will provide a greater floor for Bitcoin. Given that the global economic climate will stay supportive, institutional investors will continue to choose Bitcoin investing in general," Del Wang noted.
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