It wasn’t long ago that the crypto-sphere was glittering with crypto prices at all-time highs. Adverts for blockchain companies adorned sporting events around the world. All the leading brands were rushing to launch NFTs, and celebrities were going all out to promote digital collectibles.
But fast-forward a year and crypto prices and trading volumes have tanked, blockchain companies are losing investors and money, high-profile personalities are in jail, and financial regulators are baying for blood.
Is it still a crypto winter or have we entered an ice age?
Down, but not out
Karl Blomsterwall, CEO, Planet IX, isn’t surprised by the reaction. He agrees that the situation must be daunting for people new to the space. But for the experienced campaigners, this period is part of the regular ebb and flow of the market.
“Naturally the more mainstream crypto and blockchain becomes, the more awareness there will be about it and most likely the more prolific some of the negative cases we see will be,” says Blomsterwall.
Vasseh Ahmed, Managing Director of Enjinstarter MENA adds that crypto and NFT prices are often, mistakenly used as a bellwether for the industry. In fact, he doesn’t buy into the prevalent sentiment of doom and gloom.
Read: Blockchain Gaming continues to be immune to market downturns
Ahmed cites the example of big financial institutions like J.P. Morgan who, he points out, are getting into blockchain– and digital-asset-based solutions in a big way. Then there’s Opera, which has launched a stablecoin wallet and transfer system for Africa called MiniPay, even as Web3 games continue to grow and help gamers generate much-needed revenue.
“For example, in February this year, Web3 project Carbon Browser raised funds on our launchpad. Eight months later, they have acquired over 6 million users,” Vasseh illustrates.
Readying solutions
Richard Gardner, CEO, Modulus, couldn’t agree more. Not only does he dismiss the idea of crypto being in an ice age, he firmly believes that we may very well be reaching the tail end of its winter.
He points to much anticipated events such as Bitcoin halving, and the approval of a Bitcoin spot ETF by the US Securities and Exchange Commission. Gardner believes these events will have global ramifications, and also help decrease volatility while increasing access to the markets among retail investors.
“Companies that wish to participate in the rebound should already be planning their execution,” asserts Richard.
That resonates with Ahmed. “We like to say in the industry that winter is when the building and innovation happen. In my mind, an ice age would indicate that people have stopped building. That couldn’t be further from the truth. Venture investments may be down, but that hasn’t stopped projects from doubling down on their solutions,” he explains.
Read: Blockchain could play a pivotal role in the MENA region
Breaking down the behind-the-scenes development Ahmed says that while most of the building happens along three different paths, the core focus remains on building real-world utility for digital assets.
The first path, he explains, is real-world asset tokenization. This would include everything from carbon credits and gold to bonds and art, which can be put on-chain and traded for a fraction of the cost and time as compared to the traditional methods.
The second development path is towards regenerative finance and climate impact. This would include Web3 solutions that are flipping the incentives away from exploitation, redirecting them towards regeneration.
The third path, as per Ahmed, is at the intersection of AI and Web3 that seem to be complimenting each other in areas such as gaming, virtual worlds, and trading.
Bright future
Contrary to the view on the street, our experts think that instead of trying to kill the industry the increased regulatory oversight are in fact helping attract some of the biggest digital asset companies and creating an environment conducive to new startups.
“The UAE has taken a leading role as a global Web3 hub, but Hong Kong, Japan, and Bahrain have also established themselves as jurisdictions with progressive regulation,” says Vasseh. He is of the firm belief that concrete solutions backed by regulatory clarity will help the industry emerge from this crypto winter.
Read: Blockchain, regulations, boosting boom in digital asset payments
“I’m sure that we will emerge stronger as a sector sooner or later, it’s just a matter of time when the next bull season is upon us,” says Blomsterwall. “There is no doubt that crypto is here to stay and I believe we are constantly moving in a positive direction over the long term – when in doubt, zoom out.”
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