If there is one thing that has kept the entire planet of its feat in the year 2017, it has to be the Crypto Market. And if you haven’t heard of it, then I guess you well might have been living on a deserted island (just kidding).
Today, Bitcoin is the most popular cryptocurrency. With a growth rate of over 3000% in the past 12 months, it has taken the world by storm. People are still finding it hard to believe that a virtual asset has shown such an enormous growth rate in such a short span of time. Today, the total market capitalization of these assets is more than $500 Billion. Apparently, something too big for just ‘a click of a button’.
The state of Asia and crypto
When a huge chunk of money is flowing in and out, the Asian countries just can’t stay out of this game. Apart from grossly stereotyping my fellow Asian friends, they are actually good with numbers, finance, and technology, making them the perfect candidate to be a part of this global crypto market. With the growth in the crypto market, the interest of people is also growing at an exponential rate. So, let’s just first analyze the role of Asian countries in the crypto market.
On 27th September 2017, Japan’s Financial Services had officially legalized 11 cryptocurrency exchanges. One of these exchanges, ‘bitFlyer’ has more than 800,000 active users trading in Bitcoin, every day. On the other hand, it’s China that holds a major pool of the world’s Cryptocurrency miners due to their cheap electricity rates and advanced GPU powers. So, in no way Asia is new to this crypto market. They have already been an integral part of this market.
But what makes Asia so significant for the FURTHER growth of Crypto Market?
It is interesting to see that cryptocurrencies are growing at a much faster rate in Asian exchanges compared to their western counterparts. While some people tag it as a gigantic bubble, others see the market as a future for the cashless economy.
The reason for the growth of crypto market among many Asian countries may differ according to their Government’s policies, but one common reason for the growth of the crypto market is its growing popularity among the youth. Clickbait articles talking about a $100 investment in 2010 turning out to be a $10 Million return in 2017 have indeed pulled masses towards the Crypto Market. Turns out, a lot of countries do like cryptocurrency.
- Due to the cheap electricity rates in China, it has become one of the largest exporters of Bitcoin in the world. A year ago, China accounted for 90% of all bitcoin trades. However, the Chinese government wasn’t so optimistic about it. But that didn’t stop many individuals from mining and investing in cryptocurrency. Even after the shutdown of all major crypto exchanges and termination of the legal status of Bitcoins in China in November by policymakers, many Chinese investors didn’t hesitate at all to invest in yet another ICO – OneCoin, designed by a Chinese tech company Xunlei. Hence, the evergreen optimistic approach of Chinese investors is one of the prime reason for the future growth of Crypto Market.
- Apart from the optimistic approach, the fact that China is a socialist country where the Government controls most of the things, an anonymous currency is bound to be popular among the masses, making it – ‘the people’s champion’.
- Japan, on the other hand, has many local retail shops accepting Cryptocurrencies as a mode of payment. One of the reasons for the growth of Crypto market in Japan can be attributed to the action taken by the Chinese government to shut down Bitcoin exchanges in their country. Like China, Japan offers almost same resources (cheap electricity and high processing GPUs), and with the support from the Government, the crypto market in Japan is bound to stay for long, thus making its role very important for the crypto growth.
- The role of South Korea in pumping any coin is probably the biggest among all. The country hosts a dozen of Crypto Exchanges that trades in volumes more than a Billion Dollar every day. Some of the biggest exchanges are ‘Bitthump’, ‘Coinone’ and ‘Korbit’. The collective and unified way of South Koreans to trade in the market is the reason why the horse on which they bet, always wins.
Now, where does the leading economy of Asia stands in the Bitcoin Market?
Yes, we are talking about India. A country with 1.3 Billion population out of which 65% of the population is below the age of 35. A country that still hosts Asia’s oldest stock market exchange (BSE – Bombay Stock Exchange), giving us proof about its cultural heritage in Trading.
However, when it comes to India in terms of its flexibility in Bitcoin or Cryptocurrency trading, the country’s government is in a state of denial. The Indian Finance Minister, Mr. Arun Jaitley later this week, had straight away issued a statement where he said, ‘The government’s position is clear, we don’t recognize this (cryptocurrency) as legal currency as of now’. Even the Income Tax Department and The Reserve Bank of India had also shown similar concerns.
But apart from these ‘institutions’, even the common investors, i.e. the common citizens of India are also in a state of confusion to whether make an overseas investment or not. The population of India isn’t that well informed on the crypto market. But thanks to the Demonetization of their currency (Rs 500 and Rs 1000 notes), occurred on 8th November 2016, the idea of a cashless economy once again started booming. Google analytics showed that searches related to ‘Bitcoin’ spiked the trending charts later that night of Demonetization. Now, this where India’s biggest trial run began in the world of Cryptocurrency.
- A lot of local exchanges in India jumped in and suddenly the market of cryptocurrency started to thrive in India. The prices of Bitcoins on Zebpay (Indian Bitcoin Exchange), which has over 1.3 lakh users (130,000 users) touched new heights by gaining 134% in its value in just 18 days after the announcement of demonetization.
- According to one of the leading newspapers, The Economics Times, nearly 10% of world’s cryptocurrency started trading in India. They also estimated that the combined Bitcoin trading volumes in India were around Rs 500 Crores ($78,075,000) that month. Roughly, more than $210,000,000 worth Bitcoins were traded that year. This goes on to show the power of just fractions of Indians in the Bitcoin market. Imagine the scenario if just 5% of the country’s population gets into the crypto market. Bam, there you go, to the moon.
- India has a growing Internet population with over 460 Million active users, second behind China. It is estimated that by 2021, this number will increase up to 651 Million, and after the emergence of cheap and high quality ‘4G – JIO’ network in the Indian market, the scope of country’s population getting into the crypto market is promising. Even though the Government and the Reserve Bank of India are not that much optimistic about Bitcoin, however, they still believe in a cashless economy and are promoting it through their own e-Wallet applications and websites. Ultimately, it’s the people who will make a smart decision of not just storing and transferring the value of their money, but also, multiplying it to several folds with the help of cryptocurrency.
All this being said, there shouldn’t be any hesitation in considering the fact that Asia is one of the most important pillars holding the roof of the cryptocurrency market. With its untapped potential, it won’t be wrong to say that we can visualize India as well as the rest of Asia as the leading players in the market of cryptocurrency for the years to come.