In 2019, the global value of the cryptocurrency market rose from $128 billion to $240 billion. In mid-2020, the sector market capitalization surged by $13 billion more as bitcoin kicked off its current bull run. Currently, CoinMarketCap data gives digital currencies a global valuation of $654 billion. The global cryptocurrency market has gone mainstream and is exploding on all continents.
Digital currency trading has become ordinary and has been embraced in previously under banked regions in Asia, the Middle East, South America, and Africa.Cryptocurrency trading on sites like PrimeXBT is now popular in India, Nigeria, and Mexico. As crypto on-boards, more users and institutional investors, central banks, banks, and regulators are warming up to the idea that they will have to learn to co-exist with this disruptive wave.
Consequently, in a bid to attract users that make money trading cryptocurrency, Singapore’s largest bank, DBS has launched an exchange. The DBS Digital Exchange is the premier digital currency in the world, with the backing of a traditional bank. The cryptocurrency exchange is open to elite retail and institutional investors.
The exchange is featuring four of the largest movers and shakers in the crypto world; Bitcoin, XRP, Ether, and bitcoin cash.
Banks Need To Innovate Around Crypto
Cryptocurrencies have existed a decade now, and financial institutions have shockingly snubbed their rise. Most of them are missing the potential that lies within the crypto banking sector as crypto exchanges like PrimeXBT reap huge margins from these services. That said, a few progressive players are starting cryptocurrency ecosystem support services and products.
Older banking institutions attribute this inertia to crypto’s bad press. However, as the COVID-19 pandemic drives more investors to cryptocurrencies and away from the banking industry’s negative interest environment, there will be fewer savers holding on to fiat. Knowledgeable investors will hold more cryptocurrencies in their investment portfolios.
Tech savvy millennials and post millennials from emerging economies are also getting into the crypto market, avoiding the weak banking systems of their regions. As more fiat currencies weaken and grow highly volatile under high inflation regimes, digital currencies will thrive in fragile banking systems environments. As legacy banks seek to expand into these zones, they will need to address the population’s need for crypto-asset banking.
Cryptocurrencies are the Trojan horse that could propel financial sector players into the competitiveness enjoyed by Fintechs. Banks are facing a lot of pressure from tech giants and nimble Fintech startups.
These players’ competitive edge is an open arms policy towards all things technology, including blockchain and cryptocurrencies. Should banks fail their customer’s needs for crypto investment infrastructure, they will eventually bow out to these deep-pocketed forward-thinking businesses.
Legitimizing Investments in Crypto
The DBS Digital Exchange will help legitimize crypto-asset investment and spur more financial institutions to innovate around crypto.
The exchange will allow crypto holders to trade their digital currency holdings against the Hong Kong dollar, the Singapore dollar, the Japanese yen, and the US dollar. The exchange will also provide security token offerings to help businesses raise capital by digitizing their financial assets.
Services by the DBS Digital Exchange will benefit institutional investors and accredited retail investors. The retail investors with an income above $224,000 or with a net asset worth of $1 million can access the exchange’s services via the DBS Private Bank or Vickers Securities.
Smaller retail players can also make money-trading cryptocurrency by buying and holding top assets and waiting for their values to rise. As an illustration, there are predictions that bitcoin could rise above $500,000 per token in years to come.
Traders that prefer short-term investment leverage the sector’s high volatility and reap huge returns. They can choose to go long or short on the token of their choice through crypto derivatives trading platforms like PrimeXBT. Crypto margin trading brings in the added advantage of leverage, while staking brings in passive income for the buy and hold investor.
Cryptocurrency exchanges also offer arbitrage-allowing buyers to buy low and sell high across exchanges. The Korean bitcoin market’s Kimchi Premium, for instance, allows traders to earn more for sales in the region than they would in other bitcoin markets. Crypto lending is also gaining traction in peer-to-peer marketplaces, giving lenders earnings in interest.