Crypto Market Forecasting
DeFi and Digital Asset Institutionalization and the Future
Token2049 was successfully held in Singapore from September 13th to September 14th. It attracted over ten thousand attendees and numerous projects, marking a several-fold increase in participation compared to previous years.
Token2049 also invited multiple industry experts to engage in discussions on topics such as market trends, regulations, and the future institutionalization of cryptocurrencies.
Mike Belshe, CEO of BitGo, emphasized the importance of investor protection and asset security, supporting regulations like AML and KYC, while Hong Fang, CEO of OKX, stressed the importance of transparency and technology in regulating the crypto industry.
Rene Michau of Standard Chartered highlighted challenges related to regulations and securely managing public and private key pairs for products based on public chains. Evy Theunis from DBS emphasized the need for liquidity and the development of secondary markets for institutionalizing cryptocurrencies.
The 2023 Token2049 in Singapore was successfully concluded last week (September 13-14). As one of the annual crypto events, the event brought together investors and industry players from all over the world and invited industry leaders to share their insights in multiple sessions.
Let’s review the highlights and trends we observed at this year’s Token2049.
Regulation has always been a top concern for the crypto and blockchain industry. Different countries have different attitudes and regulations towards cryptocurrencies and blockchain-related technologies. This can have a major impact on how businesses choose their future investment markets and develop technologies.
In the past two years, the crypto industry has experienced negative events, from the collapse of Luna and the bankruptcy of FTX to the latest JPEG fraud. As a result, countries have begun to discuss the establishment of stricter regulations to protect investors and prevent similar events from happening again.
At this year’s related forums, industry leaders discussed the current state of cryptocurrency regulation and shared their views on how to move forward in the session ‘The Future of Crypto: Regulatory Uncertainty and the Path Forward’.
Mike Belshe, co-founder of BitGo, believed that cryptocurrency regulation should prioritize the protection of investors and ensure the security of their assets. He does not oppose the establishment of AML, KYC, and other regulations, but he believes that lawmakers should currently use regulations to ensure that assets are not destroyed and to establish investor trading regulations to boost public confidence in the market.
Hong Fang, CEO of OKX, agreed with Belshe’s analysis of transparency and pain points. She also believed that technology solutions should be considered to enhance the regulation of the crypto industry. She took ZK technology as an example, explaining that it can “really prove that the assets are backed up 100% and people can go and check on a monthly basis regularly.”
“I think the beauty of having the technology solution is that, compared to traditional audits, traditional audits are snapshots of one certain time, and you can not see in between,” she said. “But in Crypto, in Web3, actually, everything is on the chain. We put all our addresses out there. Everybody can go and check the fund, inflows, and outflows all the time, in real-time. So I think that’s part of the advantage of our technology, and we should try to actually utilize it for people’s benefit”, she supplemented.
(Pictured from left to right at the session ‘The Future of Crypto: Regulatory Uncertainty and the Path Forward’, Annabelle Droulers, Brad Garlinghouse, Hong Fang and Mike Belshe.)
Crypto Market Forecasting
Naturally, another important piece of information that cryptocurrency investors want to learn about at Token2049 is the trend of the cryptocurrency market. In the past two years, as the cryptocurrency market has gradually moved from a bull market to a bear market, and Bitcoin has also shown signs of weakness, investors are most interested in knowing when cryptocurrencies will rebound, as well as the expected market trends and investment strategies in the short, medium and long term.
Andrei Grachev, Managing Partner of DWF Labs, pointed out that the market activity in recent times is indeed less active than in previous years.
‘If you compare with institutional activities in the market, it is also decreasing, and the funds I mean natives to the funds are also not so active now. if you compare a startup group fundraiser in 2021, it was super easy to fundraise like a million right just for a week or two weeks. Now it is complicated and activity is kind of dead. Fewer projects went to big share for most of the exchanges…less large parts, less high priority…’
Regarding to recent relatively bullish market for cryptocurrency, he explained that the current market has low liquidity and relatively mild price volatility. If there is an authoritative market that encourages investors to start trading, more and more people will start trading due to herd mentality.
‘From my point of view, the good opportunity is tokens with supportive directive markets that no market can’, he said. ‘If people want to gamble, people will do it. It’s not really correct to think that someone doing something behind it, it’s just the crowd….you could see that when a lot of people are doing something together, their skills and their kind of knowledge are going to be less and less.
DeFi and Digital Asset Institutionalization and the Future
Another topic that has been in focus this year is the future collaboration between banks and digital assets, as well as the institutionalization of digital assets. Will cryptocurrencies or digital assets in the future be able to borrow from the model of financial institutions to become more stable and structured financial products? This is also a serious issue that the cryptocurrency industry must consider if it wants to continue to develop in the long term in the future.
In the lecture “Banking with Crypto: Insights from Bankers“, Rene Michau, Global Head of Digital Assets at Standard Chartered, raised two potential challenges for digital assets to move towards financial institutions: regulations and the scale of the marketization of the digital assets market.
‘The way that we work today is that we run a set of ledgers within the bank and we use messaging systems like Swift and other clearing networks in order to help each other update each other’s ledgers so that everything matches… we’ve got some controls around that to make sure that we don’t do the wrong thing,’ Michau elaborated. ‘But when we’re talking about offering products based on a particular public chain, these are networks that we don’t have the admin password, right? We can’t change that. What we have to do is we have to focus on securely managing public and private key pairs, whether it’s for our own money or for the money of our clients in order to bring that to market. And so that’s a much more complex set of challenges to work through and a very different paradigm. And then you add to that regulatory burden around that or the regulatory uncertainty, the evolving regulations, and that lets you get more of that. So there are some of the challenges that I think we face.
Evy Theunis, DBS Head of Digital Assets, believed that if cryptocurrencies are to be institutionalized, liquidity and the size of trading volumes must also be paid attention to.
‘If I give an example on digital assets, the security token space, when you look at security token space, it doesn’t just require the technology to be ready and scalable and ready for large size transactions, but it also requires it to have the liquidity in the system, she said. ‘It requires you to be able to get a secondary market up and running. So these types of real-world issues need to be solved. You can not only look at the technology, you need to look at it in conjunction.’
For the cryptocurrency market, the past two years have not been particularly smooth. In addition to the fact that prices are no longer growing as fast as they did during the boom, a series of legal disputes and negative bankruptcy controversies have cast a shadow over it. However, through the analysis of the different aspects of the above lectures, it can be found that this may be an opportunity to re-examine the basic framework from the ground up.
The fact that Token2049 still attracted over 10,000 attendees this year shows that the public is still interested in cryptocurrencies. However, for this industry that has been developing for over ten years, if it still wants to continue to develop in the long term in the future, there is still much room for improvement and potential. We will wait and see what surprises the industry will bring in the future.
PayPal: Revolutionizing the Fintech Landscape and Its Future Prospects
Mastercard Unveiled: Exploring Stock Trends, and Investment Opportunities
Vietnam's Fintech Boom: A Comprehensive Analysis of Market Growth and Trends
Understanding the Key Drivers in the Current Fintech Sector
Pioneering the Future of Smart Cities: Key Elements Shaping Urban Development
Should You Buy Meta Stock? The Introduction and Recent Developments of Meta Platforms