Today’s article is based on the interpretation and understanding of part of the report on the Southeast Asian venture capital market recently released by White Star Capital (hereinafter referred to as White Star Capital). If you need to report, there is a way to obtain it at the end of the article.
Southeast Asia is a diversified region with a growing population and increasing income. It is also the new region with the most venture capital investment in the past ten years. The growth rate of GDP per capita is four times the world average. The growth rate of the labor force is the second in the world, and the active population base continues An increase of 480 million Internet users in the region. Since 2019, more than $120 billion in venture capital has been invested in start-ups in Southeast Asia. In view of this rapid growth, capital has a long-term optimistic attitude towards the Southeast Asian market.
A Mecca for Crypto Entrepreneurs
This is not only a paradise for investors, but also a sanctuary for cryptocurrency entrepreneurs. Every year, many encryption entrepreneurs and investors look for high-growth startups in this field.
According to the White Star Capital report, there are currently more than 600 crypto or blockchain companies headquartered in Southeast Asia. It is worth mentioning that among all Southeast Asian countries, Singapore has the best cryptocurrency investment environment. Many cryptocurrency companies have relocated their headquarters to Singapore, including Huobi, Binance, Coinbase, OKCoin, etc. .
Much of Southeast Asia's recent growth in venture capital funding has come from crypto, blockchain and web3 startups, which have attracted close to $1 billion in funding so far in 2022 alone.
According to the data of the past two years, with Axie Infinity becoming one of the most popular blockchain games in 2021, most startups in the cryptocurrency field in Southeast Asia have also poured into the game field. Among them, Vietnam, the new game startups established in 2021 accounted for 80% of the entire Southeast Asian market.
Several reasons to be optimistic about the encryption market in Southeast Asia
1. The attitude of the government
The news from various places, that is, the strength of the government's support, etc., all show support for the development and adoption of digital assets in Southeast Asia. Although the regulatory system is still being formulated, most Southeast Asian governments are adopting an attitude of regulation rather than prohibition. There are even many countries that have developed a strong interest in this market.
Especially in recent years, digital assets have received too much attention in Southeast Asia. According to the report, it is expected that in recent years, regulators in Southeast Asia will continue to develop their regulatory framework for regulating digital assets. As the usage rate of digital assets increases, the possibility of being "suddenly stopped" by the government becomes smaller, so the future prospects of this industry will be full of vitality in the Southeast Asian market.
2. Public attitude
As the ecosystem in the digital field in Southeast Asia has become more mature, many good cases have emerged in recent years. Cryptocurrency adoption in Southeast Asia will average 3.56 percent in 2021, according to White Star Capital, but Singapore has cryptocurrencies with nearly 10 percent of the population, ahead of the U.S. at 8.3 percent. Chainalysis found that Vietnam and Thailand will also be second only to the US in 2021 in terms of DeFi adoption. Therefore, it is not difficult to see that the participation and mobility of the public are still very high.
3. The attitude of the market
According to the report, the initial success of Play-to-Earn games such as AxieInfinity in Southeast Asia has aroused great interest in digital assets among Southeast Asian developers and consumers. The survey also found that Southeast Asians are generally willing to try new technologies and quickly adopt new technology solutions. Therefore, the report concludes that it is expected that blockchain technology and digital assets will also be recognized by the public and try it. Then the digital encryption market in Southeast Asia will accelerate its development.
At the same time, Southeast Asia’s cryptocurrency-friendly regulatory environment and growing blockchain development talent pool have also created a healthy ecosystem for digital asset startups to flourish.
Southeast Asia is expected to become the investment capital of encrypted assets
With nearly 700 million inhabitants, Southeast Asia is currently the world's fastest-growing population; of these 700 million residents, 480 million are active Internet users, and growing. Asia is expected to account for half of global GDP and 40% of global consumption by 2040, the bulk of which comes from the 10 members of the Association of Southeast Asian Nations (ASEAN), a report by Pinebridge Investments found.
Southeast Asian countries, while on par with other developing countries, have made some gains in the financial sector over the past decade, and while the region has made strides in financial inclusion over the past decade, according to a 2019 report by BainCapital, in In Southeast Asia, more than 70% of adults are still "unbanked" or "unbanked".
This means that the lack of formal banking provides a huge space for its cryptocurrency space. Decentralized finance will likely thrive in Southeast Asia as it uses distributed ledger technology to process transactions and promises to allow users to earn yields and access funds without cumbersome traditional financial intermediaries. For example, blockchain games (GameFi) that allow users to earn money by playing are also popular, such as AxieInfinity in Vietnam, which has a large following in the Philippines and Indonesia.
Therefore, the demographic structure of Southeast Asia is very favorable for the cryptocurrency market. Most young people are willing to try new things; the incentives of cryptocurrency are interesting. The same White Star report shows that investors from all over the world are attracted by the vibrant web3 scene in Southeast Asia, among which investors from the United States, China and Singapore are the most active, making them ideal places for cryptocurrency companies. Of course, those countries in Southeast Asia also have their own specialties. For example, Vietnam is the source of "hard-core engineers", while the Philippines likes entertainment, Thailand's financial market is full of vitality, while Singapore has more SaaS products, Indonesian cryptocurrency trading So Pintu recently completed a $113 million Series B round of financing.
To attract Southeast Asian investors, not only local entrepreneurs, but also many other countries. For example, New York-based cryptocurrency exchange Gemini announced its roadmap to enter Southeast Asia last year; Coinbase plans to recruit in Southeast Asia and so on. Similarly, in addition to satisfying consumer needs, Southeast Asian countries are relatively open to cryptocurrencies. It is important to know that cryptocurrencies are basically banned in my country, and are subject to more and more regulatory scrutiny in the United States.
Therefore, it is not difficult to understand that the paradise of cryptocurrency in the future is none other than Southeast Asian countries.
write at the end
From the continuous development of the economy and the reform of the financial industry by cryptocurrencies, the Southeast Asian region has undergone tremendous changes. However, according to the report, the cryptocurrency industry in Southeast Asia is just getting started. Although there are many blockchain-based businesses in Southeast Asia that are doing well, there is still a lot of room for improvement. Then we need policy makers who can make the right decisions so that the cryptocurrency market continues to grow in the medium to long term. Of course, we also see that many Southeast Asian regulators are working hard to promote cryptocurrency standards and strengthen market infrastructure for a bright future in the digital market.
The above views represent the views of the author only, not the views of the platform. Investment is risky, please invest carefully!
Catherine
