October 22, 2021

Two Glowing Opportunities in an Expanding Crypto Market​​

by Matt Cheng

Back in May of 2010, Bitcoin miner Laszlo Hanyecz bought two slices of pizza for ten thousand Bitcoin tokens. Fast forward ten years later, Bitcoin exceeds a market valuation of $600M, and one can’t help but think that this may have been the world’s most expensive pizza in retrospect. With that transaction aside, Bitcoin’s exponential rise in value more broadly speaks to the tremendous growth of cryptocurrency markets within the last ten years. The overall growth in adoption and development in cryptocurrencies and other digital assets has facilitated the rise of Bitcoin, making the asset more popular and accessible. And to-date, the total number of cryptocurrency users worldwide already exceeds 100M. It’s clear that cryptocurrency is no longer an asset for just the few.​​

One clear trend from recent developments in crypto markets is that, regardless of one’s background in investing, cryptocurrencies are becoming popular among all types of investors. Not only are there young, inexperienced investors dipping their toes for the first time, we also see multinational enterprises and traditional institutional investors getting warm to the idea of offering investment channels into cryptocurrencies. The emergence of these new trends should not be overlooked. In fact, this is an opportunity that startup companies have been capitalizing on.

​​As a prime example from our own portfolio, Kikitrade is a cryptocurrency exchange platform based in Hong Kong that actively targets young investors entering the crypto markets for the first time. For people with little to no background in cryptocurrency, some of the biggest learning hurdles include navigating huge information gaps, understanding crypto lingo, and knowing how to utilize complex trading tools. Kikitrade addresses this by stripping away unnecessary functionalities down to a simple, concise interface that is easy to use for new investors. Kikitrade also added a social component to the platform where users can interact with others and join communities centered around crypto investing. In addition, they already took into account that young investors tend to have lower levels of investable income, so Kikitrade even provides a service where users can invest as low as $1 USD on a scheduled basis. Because Kikitrade operates in different markets, one way that Kikitrade localizes their services is by creating quantitative indicators that compare cryptomarket performances to domestic market performances. After all of these hard works, Kikitrade has captured the hearts of countless young investors. In Taiwan alone, more than 70% of users are Gen-Z. ​​

On the other side of the spectrum, large enterprises and institutional investors have had a wait-and-see mindset when approaching cryptocurrency. However, with the shifting landscape, over 70% of institutional investors have planned to enter the cryptocurrency space, and nearly half of all FICs (family investment companies) have expressed interest in following suit, according to a Goldman Sachs report. The increase in interest among established investors has created a gap between investors and the necessary tools that allow them to efficiently gather information and safely manage digital assets. This is where Aspen Digital comes into play, a Cherubic portfolio company that develops a digital asset management platform for investment managers and institutions. By integrating multiple exchanges and services, Aspen Digital enables users to execute both real-time and automated transactions while also allowing users to more efficiently track the performance of their investments across different markets and asset types. At the same time, Aspen Digital also provides services in portfolio reporting, compliance, risk management, and market analysis in order to help investment managers deliver better services to their clients. ​​

Periods of market shifts always have great opportunities lurking under the surface. With Kikitrade and Aspen Digital as two prime examples, there is still a great deal of space for innovation in the crypto space that is yet to be discovered. Whether you’re a new and inexperienced investor or an established enterprise, it is easier than ever to start investing in cryptocurrency. As the entire ecosystem continues to flourish and grow, so will the products and solutions that aim to address the need for greater innovation.

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