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Walking through Token2049, it was hard to tell that the crypto industry was going through a “winter” phase. The crypto conference held in Singapore in September attracted an unprecedented crowd of 20,000 attendees, flooding the island state with even greater numbers of blockchain enthusiasts who flocked to hundreds of side events across the city to avoid expensive tickets to the main event. And went out. events.
In the US, an ominous cloud was looming as government actions against crypto titans from FTX and Ripple to Binance and Coinbase continued to chill the industry. The “anti-crypto stance” of Washington regulators, due to the Federal Reserve raising the federal funds rate and the resulting impact on broader interest rates, “has had a significantly negative impact on VC investment in the crypto ecosystem,” said Kevin Goldstein, senior advisor at ” crypto investment firm Hashkey Capital told TechCrunch.
In search of alternative paths to growth, crypto projects and investors have looked beyond the US to Asia. “A large number of US-based crypto projects have opened offices, hired local talent and relocated people to Asia over the past several years, but there is clear evidence that many have focused on growth in APAC over the past year. As a result, it has accelerated its development initiatives. America,” Goldstein said.
The enthusiasm for Asia is attributed to the region’s growing crypto adoption and favorable policy developments. For example, the legalization of retail crypto trading in Hong Kong attracted a group of Web 3 startups to set up there in hopes of tapping into the huge investor base in mainland China, where crypto is banned. Similarly, Singapore’s clarification regarding stablecoin regulation has been well received. Circle, the US issuer of the popular stablecoin USDC, spoke with its CEO at Token2049 this year.
Paul Veradittakit, managing partner at crypto venture capital firm Pantera, told TechCrunch that Token2049 this year had the largest gathering of US crypto VCs he had seen at an Asian event.
“Things have changed quite a bit since FTX, where there has been a bit more scrutiny around regulations in the US, while there have also been some positive developments. [in Asia] Around stablecoins, XRP, or ETF possibilities,” Veradittakit said, referring to Ripple’s acquisition of a license in Singapore to offer payment services based on its
“Although FTX has impacted everyone, I think people in Asia can easily forget that and actually be able to start a company here, be able to get a banking license and actually work that way. ‘See possibilities where they don’t.’ There is a fear of going to jail. This is very, very important for entrepreneurs,” he stressed.
Ray of Hope
The 19-hour flight from New York to Singapore was worthwhile for Coco Key, who was convinced that Asia was becoming an attractive destination for crypto projects looking for users and talent. At the event, the blockchain-focused investor, who runs Global Advisors, Met with a founder who was in the process of relocating from California to Hong Kong, where his company had received city financial assistance to hire local staff and rent subsidized office space.
“Whereas [crypto] As project teams become increasingly distributed with members located globally, projects launched outside the US postpone adding US operations, mostly to avoid potential regulatory liabilities,” Key said.
Some US crypto players that are planning or have started hiring in Asia include Coinbase, Galaxy, Gemini, Paxos, and CMT Digital.
For investors and founders who are still considering an Asia strategy, it is important to understand the specific market opportunities in the culturally and demographically diverse region. For example, companies in South Korea have had success incorporating tokenomics into the fan economy. Japan has a wealth of TV and gaming intellectual property that is suitable for NFT adoption. Vietnam gained a reputation for developing blockchain games after the immense success of Axie Infinity. As major financial centres, Singapore and Hong Kong are leading the effort to regulate institutional crypto finance.
As with any international expansion effort, it is important to have local investors or partners to assist with go-to-market strategies. Thankfully, there is no shortage of Asian investors interested in the new asset class.
“The thing to look for is local expertise on how to reach users,” said Jordi Alexander, chief investment officer at crypto investment firm Cellini Capital. “American or Western projects don’t really know how to get access to [Asian] community because there are language barriers. There are different social media. For example, they have these huge Telegram groups, so it’s a very different way to reach people. [Western firms] They don’t necessarily have to be. Having local investors to provide them with expertise [is important],
