THE FUTURE OF INVESTMENT: ‘Bitcoin is millennials gold’ City fund manager embraces cryptocurrencies
Cryptocurrencies are often seen as an abstract concept for those more familiar with the traditional investment scene. After all, bitcoin-like tokens are intangible assets with high price volatility — so far — and limited use-cases. Yet, the conversation has evolved in recent years as the promise of digital assets has piqued the interest of investors and fund managers.
In a recent FinancialFox interview, we talked to Amanda van Dyke, Managing Director at ARCH Emerging Markets and an experienced gold fund manager. Regarding investment opportunities in gold, Amanda mentioned that “Bitcoin is millennials’ gold”, referring to the younger generations adopting cryptocurrencies as a legitimate store of wealth. Endorsement of crypto by an experienced fund manager such as Amanda is telling of the transformation that the traditional investment space is undergoing.
While much has already been said about digital coins becoming mainstream and replacing cash, the conversation has now broadened. Prompted by the recent financial market frenzy, record low interest rates and global economic uncertainty, cryptocurrencies are starting to seem like an attractive investment option too. “As people become increasingly distrustful of the global economic system, they want alternative forms of securing wealth,” Amanda commented.
“I see cryptocurrencies as millennials’ gold. People invest in gold in times of uncertainty because it is an asset that is outside of the financial system, it is an unconnected wealth preserver,” Amanda said. “For millennials, Bitcoin is very real, and they would rather own Bitcoin than an ounce of gold. They are a smaller but growing part of the world economy and they understand cryptocurrencies very well. Bitcoin is here to stay.”
Millennials and the younger generations have grown used to the concept of digitalised economy and instead of looking into gold or bullion, they are more comfortable with the idea of digital money. Bitcoin is the current crypto market leader: the first cryptocurrency to come to existence in 2009 and the first coin to become ‘mainstream’. For this reason, Bitcoin is the first point of contact for many coming from traditional investment.
But since Bitcoin’s inception, many different coins have been launched, inspired by the concept of a blockchain-built coin. The level of sophistication of today’s cryptocurrencies is much higher than in Bitcoin’s early days, as it has become increasingly clear that cryptocurrencies have multiple applications and offer infinite possibilities.
Ethereum, the second largest cryptocurrency, has gathered more attention due to its application in smart contracts and decentralised finance, and is increasingly gaining ground in the crypto market.
Looking at the global economy, it becomes clearer that cryptocurrencies have strong use-cases, particularly in countries where the existing financial systems have proved almost inaccessible for a large part of the population. Cryptocurrencies have boomed in developing and emerging economies because they offer a range of financial services at low cost and high efficiency.
Emerging economies’ currencies are famously volatile, very often going through periods of high devaluation which harms businesses, particularly small and medium enterprises (SMEs). The advent of cryptocurrencies has presented a long-awaited opportunity to leapfrog a bureaucratic and unequal system.
With a significant younger population, Africa is one of the most promising places for cryptocurrencies. In Nigeria, the Securities and Exchange Commission announced plans to regulate cryptocurrencies. According to the regulating body, the move aims to increase protection for investors and create a safe environment for trading: “the general objective of regulation is not to hinder technology or stifle innovation, but to create standards that encourage ethical practices,” said the announcement.
“African future generations will probably define a significant portion of global trends as a consumer group, driving further adoption for technologies suitable for consumer preferences,” Nimbus Platform’s Fernando Martinho told Finance Magnates.
“Bitcoin helped to protect my business against the currency devaluation, and enabled me to grow at the same time. You don’t have to pay charges, you don’t have to buy dollars,” said Nigerian street vendor Abolaji Odunjo to Arab News, referring to his decision to pay his suppliers in Bitcoin.
Watch the interview with Amanda van Dyke here:
The traditional investment crowd can join the crypto movement.
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