“Asia will be one of the key drivers for the next time [crypto] bull run”

As the crypto winter continues, there has been much speculation about what lies on the other side. Regulators are watching the space more closely than ever before, and a number of companies have already fallen victim to the bear market.

Among those that remain standing, this market cycle — while difficult — comes with silver linings.

As Sino Global Capital CEO Matthew Graham says at Token2049, “The LARPs are gone, and the true builders are here.” Surviving these market conditions is a testament to a company’s true value. Projects are no longer funded on the basis of speculation or hype, but rather on the basis of their usefulness.

It appears that the crypto space is getting healthier, despite what current coin prices may suggest. For some investors, this has been an ideal time to start buying in.

I tend to be very counter-cyclical. I fundamentally believe that bear markets are where you make money and bull markets are where you find out how much money you’ve made.

– Matthew Graham, CEO, Sino Global Capital

“I become very strict and stingy [during bull markets] when I see people buying yachts and being very happy, Graham continues. “Then, in bear markets, that’s when we get much more aggressive.” Since valuations are much more reasonable at this point, Graham sees it as the perfect time to invest.

Folius Ventures founder Jason Kam confirms the sentiment, commenting on the Web3 space’s continued growth and development.

Kam believes that the Web2 founders are being driven out of the space due to a number of factors, whether it is poor compensation or share prices. “Web3 is a very interesting option for them, given the quality and number of founders [in Web3] actually improved this year.”

Where is the crypto industry headed?

In the early days of crypto, the industry was primarily influenced by endogenous factors. The prices of coins such as Bitcoin and Ethereum did not react heavily to broader economic changes.

Today, crypto prices have become more responsive to macro events.

Ryan Kim – co-founder of South Korean crypto venture fund Hashed – believes this provides the perfect opportunity for the space to grow and develop.

“This bear market is not like the one in 2018,” he says. The downturn is not limited to crypto, but also other financial markets. Given equality, companies in the Web2 space remain motivated to enter the Web3 world.

Companies aside, Kim adds that regulators should use this time to strengthen their foundations and prepare for the growth of the crypto ecosystem. “We are in close contact with [regulators in Korea] to come up with the right guidelines and regulations.”

Crypto adoption has continued to increase recently, with on-chain activity at an all-time high.

Gleb Kostarev, Regional Head of Binance (Asia), believes that Asia, in particular, has played a big role in this. “In some Asian countries, the traditional financial system is not that strong. It opens up the possibility that crypto can be put to use.”

Kostarev points to the collapse of traditional finance in Sri Lanka and the high inflation rates in Turkey. “There is great instability in the world [in terms of] economics and politics, but actually this volatility is really driving crypto adoption.”

That said, in some jurisdictions, regulators have slowed the rate of growth. “In countries like India and Indonesia, we see taxes per transaction. This affects the industry [local presence] in a bad way.”

Acknowledging that regulators have their own concerns to address, Kostarev adds that it is the industry players’ job to help them better understand the space. All things considered, he says, “Asia will definitely be one of the key drivers of the next bull run when it starts.”

Is crypto ready for a mainstream audience?

While adoption is increasing, there are still concerns that everyday users may find it difficult to get started with crypto. From making wallets to researching protocols, there is a lot to learn before getting comfortable in the space.

“Basically, we need to be more mainstream friendly,” says Matthew Graham, referring to crypto’s DeFi applications.

I like to think of my mom and my sisters as an example because they are very smart people who are not very technical. If I have to explain [private keys] and [need to protect against hackers] for them, they will never use these things.

– Matthew Graham, CEO, Sino Global Capital

DeFi requires users to take responsibility for the security and protection of their funds. The space has seen countless scams and cover-ups in recent years, and even for people willing to put in the time, it can be difficult to stay safe.

Although free from human error, DeFi protocols are prone to hacks. Without an understanding of smart contracts, users cannot determine whether a protocol is at risk of being exploited. In a quest for ease of use, crypto may be moving away from its ethos of decentralization.

“I think the anonymous characteristic is quite a difficult point,” comments Kim DeFi from a regulatory perspective. Due to a lack of KYC checks, criminals have been able to launder funds through DeFi protocols such as Tornado Cash.

“To [mass adoption], technical aspects have to be very simple,” adds Kim. He says that regular users should be able to participate in DeFi without having to create a crypto wallet.

“Perhaps a centralized entity is needed to provide a better user experience. Even if one [incident] happens, they can [be held responsible] to get users’ money back.”

Featured Image Credit: Binance

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