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Ten years ago, if you asked someone about their plans to build wealth, their answer would likely have been a long-term investment in real estate, S&P 500, bonds, private equity, or hedge funds. Fast forward to 2022 and DeFi revolutionized the way people seek to build wealth for the future, with digital assets now providing a new alternative investment opportunity.
Despite generational wealth being accumulated through traditional investment flows, a recent CNBC Millionaire Survey found that 47% of millennials have 25% of their portfolio invested in cryptocurrencies. Even with such clear signs that cryptocurrency is pioneering a new way to build wealth for years to come, the survey recorded that only about 10% of American millionaires own more than 10% in crypto investments, with 83% owning none.
Evidence also shows that widespread adoption of cryptocurrencies is beginning to change the way the wealth management industry, including private banks, brokers, and wealth management firms, is adapting to the rapidly evolving cryptocurrency landscape as pension funds begin to invest in cryptocurrencies as well.
Although cryptocurrency has gone mainstream over the past few years, the digital asset has come from humble beginnings. From 2008 when the domain name bitcoin.org was registered, to 2009 when Satoshi Nakamoto sent 50 BTC as the first Bitcoin transaction to Hal Finney, the cryptocurrency has come a long way since its inception. By 2020, Bitcoin has reached several milestones, including breaking the record of 2017 when it first traded at $20,000. March of 2021 saw its value reach $60,000, and in April, some of the world’s biggest brands were taking bitcoin as a payment. In September, El Salvador became the first country to adopt bitcoin as a legal tender.
Many of the industries that provided investors with great wealth were those that had not been discovered or had untapped potential. A good example of this is the growth of stocks in under-the-radar tech companies like Shopify before they explode in value. Investors who have been able to identify the potential behind this opportunity have seen a tremendous return on investment.
Even as cryptocurrencies quickly turn to traditional news, they still have room to grow, with experts predicting that the projected value of bitcoin is on track to compete with gold – likely to reach $100,000 within the next five years.
The attraction to digital assets lies in many factors, the most important of which is that it is decentralized, i.e. there is no central authority or controlling entity that can manipulate or impose any form of control over your assets. Cryptocurrencies are not the only digital asset born from the blockchain as NFTs (non-fungible tokens) have also seen a huge upward trend in their popularity over the past year. NFT allows creators to sell all kinds of artwork – images, video or audio – all stored on the blockchain.
One of the leaders in the DeFi space is Baanx, a company that builds the infrastructure needed for the mass adoption of digital assets. By helping consumers and businesses harness cryptocurrency, this financial technology aims to change how the world interacts with their crypto investments and create more use cases for their digital asset holdings. An example of this is the recent FCA approval that Baanx received for a Cryptodraft product that will allow users to borrow based on their crypto wallet.
Founded in 2018 by a group of innovators with a cumulative 100 years of experience in the banking sector, Baanx was built with the goal of harnessing the potential and inherent usefulness of digital assets. Fast forward to 2022, and Baanx has already partnered with industry leaders including Ledger and Tezos. Going forward, the company aims to replace traditional fintech services by bringing trust and transparency to the digital asset market.
Powered by the native tool token BXX, Baanx’s infrastructure allows users to efficiently and securely send, spend and manage their cryptocurrency, all while receiving rewards for such activities and use of the platform. The token rewards users with a distribution of network fees based on the amount of BXX held and will allow users to enjoy Cryptodrafts in the future. Users can share tokens for liquidity rewards, and earn BXX for getting fixed coins.
For those looking to create wealth for generations, investing in digital assets offers a new, more profitable and safer alternative to investments made through traditional banking. As companies like Baanx continue to push the envelope and create more use cases for crypto investments, savvy investors are likely to benefit from early investing.