Will Asia’s billionaire moguls jump on the crypto bandwagon?

Weekly round-up of blockchain developments and crypto activities

Ethereum ecosystem is exploding (Image: Forbes)

What grabbed my attention last week was the US$1 billion fund that VC firm Andreessen Horowitz intends to raise to invest in cryptocurrencies and crypto startups. It would be one of the largest funds dedicated to crypto, said a report in the Financial Times.

Needless, the push for the fund came from its investment in Coinbase which had a rousing public listing on Nasdaq last month. This move by one of Silicon Valley’s highest profile VC firms is a sign of confidence in the crypto market. It is sure to spur other investors into building large war chests to invest in blockchain and cryptocurrency.

Asian institutional investors and VCs will not be watching these developments on the sidelines. Many are investing. Others like Hong Kong-headquartered financial giant Henyep with US$35 billion annual turnover, are entering the crypto business. Henyep set up its subsidiary Q9 Capital earlier this year to meet rising institutional demand for crypto from high-net-worth individuals and family offices.

Will there be an Asian Elon Musk buying into bitcoin? With close to 200 billionaire moguls and magnates in Asia, I dare say it would be a matter of time before they start flexing their financial muscles in the crypto market. Further interest will also be fuelled by the growing number of family offices sprouting in the region and looking into alternative investments with higher returns.

DeFi firing all cylinders

Type NFT in the search bar on Google. In less than half a second, Google returned 67.6 million responses. NFTs (non-fungible tokens) were made famous by digital artist Beeple who sold his digital art for US$69 million. Currently, the total market value for NFTs is over US$490 million, according to a report by Consensys on DeFi. Collectibles are the top sellers for NFT followed by sports digital assets and games.

The meteoric rise of NFTs can be attributed to the pandemic which changed the way people used the Internet. Artists have experienced a drastic drop in revenue while users have spent a record amount of time on the Internet. Together, a fertile environment for the digital art sale was created, supplemented by the rise of platforms to facilitate NFT transactions, explained the report on the performance of DeFi on the Ethereum blockchain for the first three months of this year.

Stablecoins on Ethereum, said the report, had dramatically risen to US$37.4 billion on Mar 31, up from US$19.5 billion on Jan 1. Ethereum is fast emerging as the settlement layer for nearly all of the leading Dapps as well as almost the entire ecosystem of digitised dollars.

“Even traditional financial service companies such as Visa will allow for transaction settlement to occur with USDC on Ethereum, displaying how stablecoins are now moving well beyond traditional crypto use cases,” the report pointed out.

Released in April, the report discussed the Ethereum ecosystem, DeFi assets, regulatory trends and of course, NFT.