According to Coindesk, in 2021, the price of bitcoin hit historic heights with mining profit margins recorded as high as 90 percent. 2021 also saw El Salvador becoming the first country in the world to accept bitcoins as legal tenders. The year also saw the US regulators approving a Bitcoin futures ETF. It seems that many other countries are showing leniency towards cryptocurrency and a lot of favourable policy structures can be expected.
Institution-wise, BlackRock and Morgan Stanley have opened up opportunities for their clients to leverage cryptocurrency. Reportedly, the European Investment Bank (EIB) used Ethereum technology to issue 100 million Euro (121 million USD) in two-year digital notes for the first time. The European and the American banks served as joint managers for the notes. It also showed participation from Goldman Sachs, Banco Santander SA and Societe Generale AG. Many countries have conveyed their interest in developing their own central bank digital currency (CBDC).
We found one such innovative service provider in the crypto market, Hodlnaut. Hodlnaut is a Singapore-based crypto lending platform that provides innovative financial services for individual investors. It recently announced its Android app that enables users to deposit and withdraw the supported cryptocurrencies anytime, anywhere from their android phones. It had already commenced similar operations on the iOS platform in August 2021.
We spoke to Sten Ivan, Head of Growth for Hodlnaut, to understand more about the latest trends in the cryptocurrency market, the factors that are leading to its growth and some key highlights from the android app.
What are the opportunities, challenges, and threats to the cryptocurrency market across the globe? Why does the Asia-Pacific region look more conducive for the crypto market?
Opportunities: Decentralized finance and blockchain technology are huge areas of opportunity within the crypto space. Besides being used as a mode of payment, blockchain technology has the potential to disrupt a number of different industries from energy management to healthcare sectors and even the e-commerce industry by lowering costs and tightening security.
Challenges: Though many financial institutions are slowly opening up to cryptocurrencies – think PayPal, Mastercard, and Stripe – we believe more can be done. While many investors are starting to understand the power of digital assets, ordinary folks would still need more knowledge on the topic of cryptocurrencies to fully understand how the tech behind it has so much potential to improve industries.
Threats: It is no secret, cryptocurrencies are known to consume tons of energy, which may harm the environment. This can pose a challenge since one of the main priorities of many countries globally is to reduce the environmental footprint. However, there are other methods such as Proof-of-Stake systems that are known to use considerably lesser amounts of energy. This is so since such systems do not need highly complex cryptographic algorithms to be solved and thus, the costs of electricity to verify transactions are lower.
Why does the Asia-Pacific region look more conducive for the crypto market?
According to a report by Nasdaq, 31% of all crypto transactions from mid-2019 to mid-2020 occurred in East Asia. This shows that Asian countries have already begun embracing the use of cryptocurrency. And one of the main drivers for this is Asia’s mobile-first approach. With the advancements in technologies, nearly all aspects of everyday life can be done through smartphones. This includes making digital payments, paying bills and loans, accessing public services, and more – think Singapore’s Grab app, South Korea’s Kakao mobile application, and China’s WeChat. This mobile-first approach has been embedded in the cultures of such Asian countries, which then allows for an opportunity for more widespread adoption of cryptocurrencies since the culture is already on board with such digital technologies.
What are the prime inhibitions of the common mass in regards to cryptocurrencies?
One of the main blockers of mass adoption would be the volatility of cryptocurrencies and the lack of understanding and knowledge with regard to digital assets. While cryptocurrency has been seeing an increase in adoption from not just retail investors but institutions as well, there is still a lack of understanding amongst many beginners and ordinary users worldwide. Moreover, since cryptocurrency is known for its volatility, it may act as a hindrance for users who prefer more stable investments.
Give us an idea of the cryptocurrency market around the world, from the iOS ecosystem and the Android ecosystem.
There are numerous iOS and Android mobile apps in the market that allow users to dabble in crypto. Whether it is a crypto exchange such as Gemini, platforms that provide crypto lending services such as Hodlnaut to mobile apps that allow users to earn crypto, like Axie Infinity, there are tons of crypto mobile apps that users can try out. With the wide variety, dabbling – and earning – in crypto has become a whole lot more convenient for users now. They can earn, trade, and play on the go, which makes it suitable for the modern-day investor who is constantly strapped for time.
What are the trends you have observed in the cryptocurrency market across the globe?
One of the obvious trends we have seen this year is the uptake in the adoption of cryptocurrencies. As we are all aware, El Salvador now accepts Bitcoin as legal tender, which is a huge step forward towards the mass adoption of crypto. Additionally, Stripe and Amazon are both reportedly looking to hire a digital currency and blockchain expert and build their own crypto-focused teams.
Another huge trend that skyrocketed this year is NFTs, which was said to have generated over $2.5 billion worth of sales in just the first half of the year. The trend of NFTs is expected to extend even further because of the versatility and flexibility of NFTs. As such, NFTs can represent almost any unique item. Since there’s so much potential in the NFT market, we will definitely see an ongoing uptick in this space.
Going by the end-user, which of the following holds more potential and why? Trading, retail, e-commerce, and banking.
E-commerce has seen a huge boost, mainly driven by the pandemic. With lockdowns being status quo, many individuals have turned to shopping online via e-commerce platforms. With the pandemic presenting a new norm, e-commerce has huge amounts of potential to expand even further. One such way is by accepting cryptocurrency as a method of payment for users. As reported earlier this year, Amazon is one such e-commerce platform that is said to be hiring a crypto team in its payments sector.
What are the key features of the new Android app from Hodlnaut?
The Hodlnaut Android App is designed for convenience and thus, supports our main features that are also available on the website. This allows Android users to earn on the go, anytime and anywhere. One of the key features of the Android App is that users are able to swap their tokens seamlessly on the app without having to source for an external wrapping merchant. Plus, users can also opt for our new Market Order function to increase the success rate of token swaps amidst market volatility. A market order is an order to buy or sell cryptocurrency at the market’s best price available. It is best to opt for a market order when users wish to execute the trade immediately.
What could be the possible outcomes of the Android User Referral Program?
The Android User Referral Program allows users to earn up to 1,100 USDC by simply referring their friends and encouraging them to sign up via our new Android mobile app. We aim to create a network effect among our users and we believe that word-of-mouth communications and reviews from friends are some of the best, most credible ways to encourage users to sign up on our platform.
Which factors could lead to promising growth for cryptocurrency in the coming years? What are the trends to look forward to?
Factors such as an increase in institutional and retail adoption as well as well-designed and comprehensive cryptocurrency regulations globally are integral for the growth of digital assets in the coming years. With these in place, we will definitely see more individuals and businesses opening up to the use of cryptocurrencies and the market becoming more mainstream.
In terms of trends, we are likely to see the growth of altcoins and increased acceptance of Bitcoin payments as more users and businesses are more attuned to the use of digital assets. So far we have already seen financial giants slowly adopting the use of crypto, and this trend will definitely prolong. Also, one key trend we are likely to see is the uptake of more environmentally-friendly methods of mining crypto. Bitcoin mining as well as its consumption of energy has had an impact on the price of the digital token as well as the environment. As such, we can expect to see innovative solutions for reducing the carbon footprint with regards to the mining of Bitcoin.
Article by Ujal Nair