Plus, 2 Leading NFT Marketplaces Are About to Go to War
Welcome to your Sunday digest…my weekly breakdown of the things we’re thinking about and talking about in the Global Intelligence world.
First up this week…the world’s emerging crypto superpower.
India has witnessed a cryptocurrency boom over the past two years.
Tens of millions of people now trade crypto in India…and this number is growing rapidly all the time.
According to a report published late last year by blockchain data platform Chainalysis, India is second globally, behind only Vietnam, in the pace of crypto adoption.
What makes India truly unique, however, is that the room for growth is mind-bogglingly massive.
India has a population of about 1.4 billion. Of those, roughly 750 million have internet access. And of those, only about 20 million or so are estimated to have traded cryptocurrency thus far.
Just 20 million out of 1.4 billion…
Some of the world’s leading cryptocurrency exchanges are looking at those numbers and betting serious money on them soaring higher.
India’s two leading crypto exchanges are CoinDCX and WazirX. CoinDCX achieved a valuation of over $1 billion last year after raising money from investors including Coinbase Ventures. WazirX, meanwhile, was bought by Binance in 2019.
These companies have good reason to believe that India’s population will continue to warm to crypto assets, and bitcoin in particular.
As in other developing nations like China, buying gold is a part of the social fabric. Distrust in government and paper currency means that the precious metal has been used for generations to store and preserve wealth.
For India’s young, increasingly tech-savvy population, buying bitcoin—often considered digital gold—is a modern way of achieving the same result.
The one issue that could impede the sector’s growth in India is government skepticism.
India’s central bank previously expressed a desire to ban crypto. That now appears unlikely, however. Legislators have instead been pushing for regulation of the sector.
If formal regulation happens, it’s not hard to imagine hundreds of millions of Indians storing part of their wealth in bitcoin and crypto.
This is what I mean when I say we’re still at the beginning of the crypto revolution…
In recent months, crypto has become a fixture of financial headlines in the U.S. and Europe. It’s easy to look at this media coverage and imagine crypto has gone mainstream.
But in reality, only around 16% of people in the U.S. own crypto. In Europe, the figure is thought to be less than 10%. And then there’s places like India…
I’ll say it again—20 million out of 1.4 billion. That’s a lot of room for growth.
We’re still early in this revolution.
Next up this week, a war is brewing in non-fungible tokens, or NFTs.
Regular readers will know that there are two ways to buy NFTs—those one-off, one-of-a-kind cryptocurrencies that represent ownership of digital assets, like virtual artworks.
You can “mint” them. That’s like participating in an initial public offering, in which you become the first owner of a new NFT when it is launched.
Or you can buy them on secondary markets.
Most secondary marketplaces focus on selling NFTs from a particular blockchain.
The biggest secondary market in the world is OpenSea. It operates on the Ethereum network.
The market where I do most of my secondary trading is MagicEden. That’s the largest market on the Solana network.
In the past, these marketplaces weren’t in competition with each other, since they operate on different networks with different NFT assets. Now, however, they’re about to go to war.
OpenSea is preparing to add Solana-based NFTs to its marketplace, essentially moving in on MagicEden’s turf.
This is a massive deal in the NFT space.
OpenSea is a vastly bigger company than MagicEden, since Ethereum is a vastly more popular network.
So, this move by OpenSea is likely to bring a lot more attention to the smaller, yet faster and cheaper Solana network.
Once OpenSea begins selling Solana-based NFTs, the expectation (rightly or wrongly) is that a lot more money will flow into Solana projects and the Solana cryptocurrency itself (since that’s used to pay for transaction fees in the buying and selling of NFTs).
Already, some of the blue-chip Solana NFTs like Degenerate Ape Academy and Solana Monkey Business have pushed sharply higher in price, with the cost of buying a base model in those NFT collections nearly doubling to $10,000 and $25,000, respectively.
OpenSea is trying to become Amazon for NFTs. Time will tell whether smaller rivals like MagicEden can prevent that from happening.
Finally, this week…consumers are losing faith in the economy.
U.S. consumer spending growth, a key measure of people’s confidence in the economy, slowed massively in February to just 0.2%.
That was down from 2.7% in January.
The cause of this lack of confidence? Inflation, of course.
Personal income rose by 0.5% in February, but inflation increased by more…which means households recorded a net loss.
In fact, income after taxes, adjusted for inflation, dropped for the seventh straight month in February and is now at its lowest level since March 2020, according to the Commerce Department.
The bottom line: This is bad news for the economy and for stocks.
People don’t spend money when they’re losing money. And that will begin to drag on corporate earnings…which in turn will begin to affect stock prices, especially in categories like non-essential consumer goods.
My expectation: Companies will increasingly pass price increases onto consumers amid persistently high inflation, and as that filters through people’s pocketbooks, Wall Street takes a big hit.
That’s why this is a good moment to move into gold, commodities, and crypto investments, particularly crypto-banks that offers rates of 10% or more. They can help you beat the inflation trap.
That brings us to the end of this week’s digest. Many thanks for being a subscriber. And if you have any feedback or questions, reach out through the contact form on the Global Intelligence website.
Enjoy the rest of your Sunday.