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Recently, in their latest edition of the Global State of Crypto Report, crypto exchange Gemini dubbed 2021 as the “breakout year” for crypto in Singapore as the market saw a mass adoption of the digital currency in the same year. Despite scepticism here and there, it revealed that more than two in five crypto owners in Singapore first started investing in crypto last year.
The report revealed many exciting statistics. For example, · more than two in five crypto owners in the country (42 per cent) turn to crypto for its inflation hedging properties –even with its stable fiat currency.
Another finding that stresses the promising future for crypto in Singapore is that 82 per cent of crypto investors intend to hold to their investments for the long term with 26 per cent believing crypto is the future of money.
In Southeast Asia, Singapore was not the only country that has begun to jump into crypto recently. In an email interview with e27, Feroze Medora, interim Managing Director and Director of Trading at Gemini APAC, described a similar situation in Indonesia.
“Amongst non-crypto owners in these countries, 42 per cent of Singapore respondents and 45 per cent of Indonesia respondents labelled themselves as crypto-curious. This means that these respondents are consumers who, while not currently owning crypto, are either interested in learning more or are likely to acquire cryptocurrency in the next year,” he explains.
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“These encouraging results contribute to a very positive outlook for the asset class in the region,” Medora stresses.
To understand more about the state of crypto adoption in Singapore and Southeast Asia, check out the edited excerpt of the interview with him.
Feroze Medora, interim Managing Director and Director of Trading at Gemini APAC. Image Credit: Gemini APAC
What are the factors that encourage the rapid growth of crypto in these markets?
Crypto has evolved from being the wild wild west to an established asset class, resulting in a shift in general public perception. With the market cap for crypto hitting almost US$3 trillion last year, the majority of investors surveyed from Asia Pacific saw crypto as a long-term investment.
Additionally, according to the report findings, countries with a history of currency devaluation also saw crypto as a hedge against inflation.
Countries such as Singapore have seen local regulators express a willingness to deliberate over-regulation and provide greater clarity for the cryptocurrency sector. This relative openness to cryptocurrency has resulted in a higher rate of adoption for such markets as opposed to countries whose regulators are closed off to the industry.
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What role does inflation play in encouraging people to embrace crypto?
Investors in countries that experience currency depreciation may look to crypto, particularly bitcoin, as an inflation hedge. Many believe that bitcoin is ‘digital gold’ given its finite supply of 21 million bitcoin. Fiat currencies are not viewed the same way given their ability to increase supply.
Should the value of bitcoin, or any other chosen crypto, increase with time, this will protect against the decreased purchasing power of a currency that results from the loss of its value. Through this method, crypto provides an alternative avenue to preserve savings.
More than half of non-crypto owning respondents in Singapore cited that the major barrier to crypto adoption was the fear of losing money. What are the other barriers for users to embrace this technology?
The biggest barriers, according to the report findings, are the lack of education non-crypto owners have on the asset class, the fear of crypto’s volatile market – which these potential investors believe would lead to them losing their funds- as well as security concerns.
The good news is that there is no lack of educational crypto materials available online, including sites such as Cryptopedia. It is also on industry players to provide an environment that welcomes new investors, and not cater solely to crypto market veterans. Crypto was created to be accessible to everyone, regardless of education level and even gender.
In terms of volatile price movements, it is vital for all potential crypto owners to do their own research before investing in a token, instead of developing FOMO and jumping on the crypto bandwagon. Additionally, research should include ensuring that they use a trustworthy exchange to conduct their trades.
How deep should government involvement be?
As key stakeholders, governments help to lay down important foundations by providing regulatory oversight in the crypto industry. Two-way engagements with the crypto community at large will be key in developing thoughtful and effective regulations.
Ultimately, when regulations are done right, they can pave the way to healthy and sustainable markets, and help unlock the potential of crypto to a wider audience.
What are the things that crypto companies need to keep in mind when promoting this technology?
As crypto companies look to accelerate the transition to cryptocurrency, the priority should be to implement proper KYC/AML measures for maximal investor protection and security.
To build trust, crypto companies would need to develop and implement solutions and a robust infrastructure that provides a safer and more secure experience for their customers.
Two in five crypto owners (40 per cent) in Singapore are women, a higher adoption rate than a number of western nations, including the US (32 per cent) and the UK (35 per cent). The report also stated that the gender gap in crypto is narrowing. Would you be able to explain why this is the case? What can we do to further promote this?
This report has challenged the belief that cryptocurrency is a ‘boys’ club’ – especially in Indonesia where more women than men own crypto.
In this day and age, more people are technologically savvy – especially with mobile phone usage. The prevalence of crypto mobile apps has made crypto even more accessible to everyone – regardless of gender.
By increasing the amount of reputable crypto educational materials, and ensuring their availability to the general public, will help to continue providing an even playing field for all.
What are the opportunities that crypto platforms in SEA should embrace?
As mentioned earlier, a big barrier to crypto adoption is the lack of education. While many already do, more crypto firms in the region need to step up as educators of the space.
Crypto platforms have the opportunity to contribute to the pool of educational resources to help the crypto curious make better-informed investment decisions. This, in turn, will encourage crypto adoption even further and help to elevate cryptocurrency as a legitimate asset class.
What is next for crypto in SEA?
The world is no stranger to the rise of NFTs in the past year or so. NFTs have introduced more of the general population to the potential of Web 3, and with that has come the hot topic of the Metaverse. We can expect even more conversations around the Metaverse this year and a continued rise in popularity of NFTs – particularly more use-cases of this new technology.
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It would not be surprising to see crypto exchanges experience growth alongside the popularity of NFTs and the Metaverse this year as well. Crypto exchanges have long operated as the gateway into the digital economy, and as mainstream adoption continues to rise, more people will need the access that only crypto exchanges can grant.
We can expect to see more institutions entering the space as the industry continues to develop and grow even further.
Currently, regulators around the world are continuing to pay attention to crypto. It is our hope that within the next 12 months, we will start to see thoughtful regulations that benefit the industry as well as the investors.
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The post 2021 was the year of crypto in Singapore, but education remains key in adoption: Gemini APAC appeared first on e27.