Initially ridiculed, crypto-assets are gaining more and more importance. In the process, companies are increasingly moving to the center of attention in the context of crypto adoption. In addition, a comparison of cryptos with the development of the internet reveals interesting parallels that could ultimately turn into great opportunities.
Fifty-five years ago, the first ATM revolutionized money transactions. Suddenly, everyone had access to cash 24/7. Admittedly, as is so often the case with innovation, this one also took time to establish itself. Initially, more ATMs were added only slowly. Today, however, there are around 7,000 machines in Switzerland alone. Since 2014, a new generation has grown alongside the "old school" machines: the Bitcoin Teller Machines (BTM). In this country, 141 crypto ATMs were already counted in 2021. Worldwide, their number more than doubled last year to around 34,000 machines - and according to Coin ATM Radar, 50 crypto machines are added every day.
Even if BTMs represent only a vanishingly small share compared to ATMs to date, the new machines are sending an important signal. Their presence is a key contributor to the adaptation of crypto-assets. After all, many consumers have no idea what crypto currencies are. With the help of BTMs, the actual virtual existence of cryptos is now being integrated into everyday life, thereby creating trust.
One of the pioneers in this field is Walmart. The U.S. retail giant, which missed the internet as an opportunity two decades ago, does not want to make the same mistake again and has therefore joined the crypto adoption. In a pilot project, 200 BTMs were already set up last year to bring the less tech-savvy closer to bitcoin. The group aims to host up to 8,000 crypto ATMs in its stores in the long term.
But that's far from all, the expansion of trading into the Metaverse is also set to intensify. Walmart's recent patent filings indicate that the company is working on its own cryptocurrency. In addition, the group is rumored to be working on a digital product offering via so-called "non-fungible tokens" (NTFs). According to CNBC, the retailer has filed several tokens that "indicate its intention to manufacture and sell virtual goods, including electronics, decoration, toys, sporting goods, and personal care products." And the group is not alone in the retail space: sporting goods giant Nike has already entered the Metaverse with its digital store on the gaming platform Roblox. The fashion label H&M, in turn, has secured its island in the classic game Animal Crossing.
As more renowned companies join the virtual worlds, a positive impact will spread even to non-specialists, synchronously increasing faith and confidence in crypto assets. Bank of America analysts are already expressing their conviction that the Metaverse will drive the adaptation of cryptos. According to experts, cryptos will not only receive a significant boost in demand as a result. However, they will also become increasingly accepted as a means of payment.
Established payment providers such as PayPal are also ensuring increasing acceptance. With the U.S. group, the purchase, sale as well as the storage of cryptos on the account have already been possible since October 2020. In addition, customers can pay with the cyber currencies at around 26 million merchants in the PayPal network. Currently, the company is reportedly even thinking about launching its own US dollar-backed coin. Credit card giant Visa also wants to bring the crypto world closer to people and has already put millions of crypto credit cards into circulation worldwide for this purpose. Now the group is aiming to integrate stable coins, i.e. digital currencies that are linked to a value such as the US dollar or gold, in order to build a bridge between the real and digital worlds.
These examples show that companies play an increasingly important role in crypto adoption. Admittedly, cyber currencies are not entirely without risks. A look at the price trend of cryptos shows a significantly more volatile movement than traditional currencies. However, the emergence of blockchain technology, on which crypto assets are based, compares well with the emergence of the internet in the 1990s. At first, the World Wide Web was barely taken not of, then at the turn of the millennium, there was a real hype in the New Economy at the time, only to come to a supposed end a short time later in the bursting of the dotcom bubble. But this was not the case: Like a phoenix from the ashes rose today's Internet giants Amazon & Co..
Like the internet, which was underestimated for a long time, cryptos are doing the same today. So history could repeat itself - and with all the opportunities that entail. An advocate of this theory is the Standard Chartered Bank. The analysts compare cryptos in 2022 to tech stocks in the early stages, mainly because an increasing correlation between crypto and technology can currently be seen. This, of course, includes setbacks. However, after the recent sharp sell-off - the total crypto market capitalization has shrunk from USD 3.1 trillion to USD 1.6 trillion between November 2021 and today - the financial firm believes that digital assets have now found a bottom. In addition, the Federal Reserve's expected interest rate hike in March should also be gradually priced in. For Bitcoin, Standard Chartered Bank forecasts prices in the range of USD 100,000 in the second half of 2022. Meanwhile, Ethereum should be able to reach the USD 10,000 mark. Regarding Ethereum, the planned switch from a proof-of-work to a proof-of-stake model in June 2022 is even considered a turning point for crypto assets in the industry. Especially since politicians in the EU are currently thinking about banning cryptos which are based on "proof-of-work" (such as Bitcoin) due to their increased energy consumption.
However the prices will develop this year, one thing is already certain given the increasing acceptance of Bitcoin & Co. worldwide: The adaptation is in full swing and the crypto project, which was started years ago by a few computer freaks, is increasingly reaching the middle of society.
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