WHY ARE THE WORLD’S TOP FINANCIAL POWERHOUSES INVOLVED WITH CRYPTO

11, September, 2022
By: Ikenna Uwakwe

INTRODUCTION:

Long after the advent of the Corona virus pandemic, the world’s financial marketplace has since transitioned the erstwhile ridiculed decentralized finance industry otherwise known as the crypto industry, from a less interesting niche to the center of focus of top financial powerhouses like; JP Morgan Chase, ICBC, Berkshire Hathaway, Bank of China, Goldman Sachs, AXA, Morgan Stanley, Citigroup, Santander, BlackRock to mention a few, as we are going to be looking into more of these firms later on in this video.

This highly anticipated marketplace – also referred to as the cryptocurrency market, although subject to fluctuating prices, with more downturns than upswings, has grown from a pushover into a multi trillion-dollar market in the span of a few years, since its introduction in 2009.

And to think that almost a decade ago, 10,000 units of the flagship cryptocurrency – Bitcoin – was traded for two large boxes of pizza, in what's now regarded as the first real world Bitcoin transaction, back when 10,000 BTC was worth a measly $40, goes to show how much potential this industry promises, going forward!

According to the world’s largest online encyclopedia – Wikipedia, no identical convention for bitcoin capitalization exists; whereas ‘some sources use Bitcoin, capitalized; to refer to the technology and network; and bitcoin, lowercase; for the unit of account.'

Nonetheless, the world's largest publicly traded corporations have been seen to put resources into the tech – known as blockchain – and get involved with cryptocurrencies in more recent times. Record has it that between September 2021 and June 2022 electronics giant and tech behemoths like Samsung, Alphabet, and venture capitalist firms like BlackRock has been rapidly involved in more developments in this space. What does that say about the future of crypto? Let’s find out in a few.

A BRIEF HISTORY OF DIGITAL MONEY:

The idea of digital currencies has existed long before the era of the discovery of cryptocurrencies. Virtual currencies like Facebook credits, game tokens, and gold coins all fall under the umbrella of digital currency. 

These are by and large centralized virtual currencies that are controlled, hence monopolized by a single, individual entities or organizations. However, since the advent of cryptocurrencies, and given it’s many advantages entailed by its fully decentralized nature, it has been the focus of not only leading financial powerhouses, but also, large corporations across various industries, and more importantly, it has continued to attract the attention of end users like you and I: Given cryptocurrencies are advanced form of cash that utilizes cryptography to secure its transactions, manage its supply, and validate it’s users - therefore, eradicating the need for such intermediaries and third-party agencies like banks.

Such cryptographic money like Bitcoin, Ethereum and XRP are decentralized in nature. In simple terms; they offer users a high degree of privacy when sending or receiving payments.

You could think of the concept of cryptocurrencies as your money in the bank, in digital form: Only this time the bank is a decentralized ecosystem known as the blockchain. 

FINANCIAL CORPORATIONS INVOLVED WITH CRYPTO

Even though this asset class has been prone to a lot of criticism, it has continued to grow rapidly and significantly in most recent times.

That said, It might baffle you to find that almost all and every leading financial corporation on the planet is secretly involved with crypto, one way or another. And while this might come as a shock to many, given the fact that a good number of criticisms regarding this asset class emanates from top-ranking executives among the world’s most popular banks and financial institutions, it is not in any way a surprise to those understands the tech. Owing to the fact that these leading financial powerhouses are well aware of the threat posed should cryptocurrency continue to thrive. Hence, they come to the realization that the best way to beat the system is to join up!

A 2018 publication by the global media company, focusing on business, investing, technology, entrepreneurship, leadership, and lifestyle – Forbes, ‘a closer look at [the 2018 edition of] Forbes Global 2000 list of the largest public companies in the world reveals that not only are all ten of the largest public companies in the world exploring blockchain, but at least 50 of the biggest names on the list have all made their own mark on technology first inspired by bitcoin.’

Whereas such corporations like Oracle, Tencent, AIA, Alibaba, Facebook,  Goldman Sachs, Walt Disney, IBM, Amazon, Daimler, Toyota, and Apple ranking on the list. Financial powerhouses from all around the world such as the Bank of China, Wells Fargo, Bank of America, Agricultural Bank of China, Berkshire Hathaway, JP Morgan & Chase, Santander, China Construction Bank Corporation and the Industrial and Commercial Bank of China - ICBC, are topping the list. 

And seeing as the government of China has been proactive in fully embracing crypto and it’s blockchain tech, it is no surprise that all of the government-owned banks in the country are actively involved in the space. Unlike its counterparts in the United States where regulatory scrutiny on cryptocurrencies and crypto-related firms, has been the order of the day. Nonetheless, several commercial banks in the U.S. have not shied away from this innovative tech.

THE MARKET OUTLOOK

Moving over to the market outlook for this space, from here on out:

According to data from market intelligence platform that analyzes data points on private companies, venture capital, startups, patents, partnerships, tech news and investor activities – CB Insights, there is a rising number in the; list of the top private companies applying or analyzing blockchain technology to solve business or consumer problems across various industries. 

CB Insights goes a step further to give us its own version of the 50 investment highlights of the top blockchain companies in 2022. Among these, 9 out of these 50 companies are early startups – which represents about 18 percent of the overall number. In addition, 31 of the 50 companies – representing 62 percent of that number – are Unicorns valued at or slightly above the $1 billion mark, as of their latest funding rounds. Looking at the funding trends of these crypto startups; in the previous year, these 50 companies have risen to a sky-high valuation of over $13 billion in equity funding across 83 different frontiers – token sales excluded!

More so, the global representation of this year’s winners are based in 15 countries, with 44 percent of these companies based outside of the United States – which is no surprise given the country’s slow-paced, yet hostile regulatory reforms towards the asset class. With 28 of these companies in the U.S., the U.K. is home to the second most Blockchain 50 companies – at a number of 5 – followed by Canada, France, Singapore, and Switzerland – all at 2.

Today, a single unit of Bitcoin is worth tens of thousands of dollars, with future speculations that this asset class could be well on its way to registering a few quadrillion dollars in a few decades. Thereby, breaking historical records and becoming the first of its kind to register such price pumps!

At this point, there is no telling what price growth the industry would amass within that timeframe. However, one thing is certain: Those who gets involves right now, beforehand, and stay invested in this asset class, are by and large going to be the most profitable when the market does see a significant surge in price. 

From that point on, you might find that investing in cryptocurrencies like Bitcoin, earlier on, would have been the best investment decision you had made your entire life. Only, at that time, chances of getting in might be too constricted, since these banks and financial corporations would all have already bought into the asset class, making it even harder to get in, from there on out.

What do you think about it all? Let us know your thoughts in the comment section, down, below!