CRYPTOCURRENCIES – TIME FOR A TRANSFORMATION OF FOCUS
To date the vast majority of noise around cryptocurrency has been from ‘fast buck’ speculators with a gold rush mentality. For them crypto is not a long-term buy-and-hold asset that can act as a store of wealth. Rather they see it as a buy-and-sell trading commodity where the mantra of success is equated back to profiting in their local fiat currency. Success for traders is measured as ‘I made five hundred pounds / euro / dollars on Bitcoin yesterday’.
UNTIL NOW A LOT OF CRYPTO ACTIVITY HAS BEEN LIKE A COMPUTER GAME
Essentially traders are playing the crypto market like it was a computer game. All the while this attitude persists crypto can never be what it set out to be – a method of decentralised finance (DeFi) and transactional value exchange outside the constraints of sovereign governments.
THE MOVE FROM TRADING CRYPTO TO USING CRYPTO TO TRADE
But that is suddenly starting to change. International fashion guru Philipp Plein has posted crypto prices on his website. If you want to buy one of his £115,000 leather bomber jackets you can now pay for it in one of 15 different cryptocurrencies. At a stroke the sense of purpose has moved from trading in crypto (a commodity) to using crypto to trade. As such crypto has finally made the transformation to being a currency.
CRYPTO WILL SAVE INTERNATIONAL BUSINESSES A FORTUNE
More importantly it has made the transformation to becoming a true global currency. From here it will only expand. As someone who travels internationally, both on business and for holidays, I know the pain and cost of foreign exchange and fees charged by credit and debit card processers. As do we all.
If you think about international fashion retailers like Philip Plein, who currently have to buy in local currency from suppliers all around the world and sell goods and account for the proceeds in a huge number of local currencies, the foreign exchange costs are enormous. The remedy is to transact in a global currency, accepting crypto from customers into a corporate digital wallet from which payments can then be disbursed through the supply chain.
HOW FAR WILL THE TRANSFORMATION GO?
The pace of technological change never ceases to amaze me. International businesses will be the early adopters of crypto as a fluid currency, and initially I think it will mostly be used for luxury high-ticket goods. But I wouldn’t want to bet on how soon it will be before high street retailers are happy to accept crypto. I also feel that within the very foreseeable future people will be given the choice to opt to be paid in crypto.
CRYPTO PENSIONS AND ISAS WILL SOON BE HERE
Even as I write, my business Dacxi is working on securing the ability for investors to include crypto in everyday financial products such as pensions and ISAs. Dacxi is not a trading platform, rather we see a role for crypto in a diversified ‘buy-and-hold’ wealth strategy. Unlike fiat currencies, where governments can simply print more money, all bona fide cryptocurrencies have a limited and finite volume which, in time should see value increase. I see these as inherently investable.
WHAT’S YOUR APPETITE TO ADOPT CRYPTO?
Some people are passionate about holding onto their sovereign currency – hence all the fuss about Britain keeping the pound and rejecting the euro when it joined the EEC. But cash is already going out of fashion and many of us, especially the young, keep their wallet on their mobile phone. Most of us today buy online, often from overseas. I believe the tipping point of cryptocurrency transformation is upon us – I look forward with excitement to seeing how the world at large reacts.
By Katharine Wooller
Katharine Wooller is managing director of Dacxi, the world’s fastest growing crypto wealth platform. Details can be found at www.dacxi.com