How are global economies turning their focus to block chain?

 Slowly, yet steadily, the Blockchain industry has carved its niche in the realm of Global financial sector over the past few years. For three reasons, we believe institutional investors can no longer afford to overlook this industry. First, cryptos (such as Bitcoin) have continued to outperform several traditional asset classes for the past three years. Second, beyond decentralized banking, we're witnessing a profusion of use cases for crypto tokens, such as Web 3.0 apps, non-fungible tokens (NFTs), and gaming.

Gary Peters from CES investments Dubai put further light on this entire debate while sharing his valuable insights. As per him, given the recent political events and conflicts across the globe, like Russia-Ukraine War, the world has witnessed a rise in demand for currency that is beyond the clutches of random sanctions and seizures.

Besides, the industry continues to attract top-tier people and financial capital, which we expect to fuel innovation in the coming years. The total value of all crypto assets has dropped by more than 30% since its all-time high in November 2021.

As per Gary Peters Dubai, while our unique Crypto Fear & Greed Index has lately recovered off the "fearful" zone, it remains at a low level, which is usually an ideal moment to invest in this game-changing industry.

How Cryptocurrency market has witnessed substantial growth over the years?

In 2021, the collective market valuation of the top-20 crypto currencies climbed by 475 percent year on year, reaching USD2.0 trillion in early April 2022, equivalent to nearly 10% of the US M2 money supply or around 20% of the value of all gold in the world. Cryptocurrencies would be the world's eighth-largest economy by GDP if they were their own country.

Gary Peters Europe further adds that it was not a one-time event in 2021. For the third year in a row, the world's most well-known cryptocurrency, Bitcoin, has surpassed all other asset classes internationally. Even bitcoin naysayers can't ignore the significance of blockchain technology and its game-changing potential in a variety of sectors. The war between Russia and Ukraine is one of the clearest real-world use cases for cryptocurrencies, as impacted residents in both nations have used it to flee, save, and settle ordinary transactions. The Ukrainian government has raised more than USD66 million through crypto-asset donations, according to Slowest.

Blockchain Industry is not just about Bitcoin!

Blockchain has a far broader use than bitcoin. Gary Peters Middle east also mentions that blockchain is a game-changing technology that will disrupt, if not completely transform, numerous global businesses including logistics, healthcare, and manufacturing. We believe it has the potential to improve how people utilize the Internet. If Web 3.0 is a success, it will have a big impact on how Big Tech progresses in the future.

According to Gary Peters UK, the total transaction volume for the major cryptocurrencies increased by 567 percent year over year to USD15.8 trillion in 2021, while experts estimated that there were around 300 million crypto users at the end of the year (up from 106 million at the beginning of the year), implying only a 4% global penetration rate.

As remarkable as these figures are, it is evident that we are still in the early phases of a growth supercycle, with the globe still in the early stages of blockchain technology invention and exploration. We might be in the early stages of a 20-year supercycle for blockchain technology, which will have far-reaching repercussions on numerous industries if the rate of cryptocurrency adoption continues to track that of the Internet when it first became popular.

Blockchain has the potential to transform the global industrial sector

Gary Peters CES investments further anticipate blockchain, like the Internet, to irreversibly change many global sectors while also spawning new ones. As per him, even Alphabet, Amazon, Meta, and Tencent, four of the top ten largest public businesses in the world by market valuation in 2021, rely nearly totally on the Internet for its operations (six if Apple and Microsoft are included); no Internet firm entered the list only ten years ago in 2011.

He believes that blockchain technology will usher in Web 3.0, and while it is unlikely to evolve in the way that it was envisioned (a totally open, decentralized Internet), it may force Big Tech to develop new income models if it takes off. Traditional finance (TradFi) is expected to lose market share to DeFi, although centralized finance (CeFi) services are expected to play a crucial role in increasing DeFi adoption.

Mass Market Adoption of Blockchain Technology

The absence of seamless interoperability of blockchains, according to Gary Peters, is a fundamental obstacle for mass-market adoption of blockchain technology (including DeFi, metaverse, and Web 3.0 applications). Despite the fact that China has outright outlawed cryptocurrencies, he believes it is positioned to be a pioneer in the use of blockchain technology due to its early emphasis on interoperability.

The absence of interoperability between blockchains, as per him, is the most significant barrier to widespread adoption of blockchains and cryptocurrencies (which in turn, includes DeFi, Metaverse and Web 3.0 applications). Finding a huge breakthrough in "layer 0" chains, or seamless, safe, and low-cost interoperability solutions, is one of the next critical catalysts for the crypto sector, Gary Peters adds.

Despite the fact that various solutions (such as Cosmos, Polkadot, and 40+ cross-chain bridges) are already available, there is no apparent victor. Recent high-profile hacks, we feel, show the challenge of building interoperability: in two consecutive months (February and March 2022), two cross-chain bridges were hacked for a total value of close to USD1 billion.

Gary Peters believe that broad acceptance of a decentralized metaverse is still at least 5 years away. Companies from many corners of the tech industry have claimed to be working on the "metaverse" since Facebook dubbed itself Meta in October 2021. While this is still a developing idea, he feels that many firms are capitalizing on it and will not provide anything new other than a more sophisticated 3D interface. A "true" metaverse, in our opinion, should have Web 3.0 properties and be hosted on permission-less infrastructure (ie, public blockchains). We estimate that any mass-market metaverse (defined as over 1 billion monthly active users [MAUs]) is still at least 5 years away.

Despite the fact that practically every software business in the world has stated that it is constructing or aims to build a metaverse, this is still a new notion. A "true" metaverse, in Gary Peters’s opinion, must meet two criteria: 1) it must be constructed on top of a public blockchain, allowing users to hold a stake in the metaverse being developed and allowing for permission-less value transfer, and 2) it must be compatible with other metaverses (or blockchains).

He believes there is a danger that the metaverse notion that many IT companies claim to be developing may end up looking more like a 3D cyberspace, virtual reality software, or a collection of existing technological services.

Summing it up

We anticipate a boom in institutional use of bitcoin in 2022, fueled in part by improved regulatory frameworks or possibly genuine regulatory action. We believe that regulations will be a long-term beneficial stimulus for the cryptocurrency sector, rather than a hindrance to its growth. Furthermore, we believe that one of the most compelling reasons to be positive about cryptocurrencies, in the long run, is that the market is attracting elite talent from traditional financial institutions and non-crypto technology enterprises.

 Central Bank Digital Currencies (CBDCs) are not a danger to cryptocurrencies, as they serve very distinct functions, in our opinion. We think that laws pave the path for long-term, sustainable growth, particularly in institutional crypto adoption. We think that all big economies with large GDPs and thriving financial sectors will have regulations as a priority.

The United States, Singapore, and Hong Kong are among the countries that have tightened their regulations on cryptocurrencies. However, this does not necessarily imply that regulations would stifle the industry's growth; rather, we believe that greater investor protection, KYC, and anti-money laundering requirements will increase institutions' confidence in deploying capital to this new asset class.

We anticipate that, between 2022 and 2023, all capital allocators, whether professional fund managers or public company CFOs, will significantly expand their exposure to cryptocurrencies or digital assets. Furthermore, numerous nations are planning to implement CBDCs between 2022 and 2023, with the United States leading the way.

China's digital yuan was "soft-launched" in early 2022, while India plans to deploy its digital currency by 2023. We perceive minimal comparative value across decentralized cryptocurrencies since CBDCs are just digital fiat currency regulated by the central bank.