When they first came into the industry, cryptocurrencies were seen as a unrealistic pipe dream which should be avoided by many. Since then though, they have become more and more famous and popular as the years go on and with Bitcoin and Ethereum climbing up to highs of $20,000 (in Bitcoins case) in December last year, the mainstream appeal of cryptocurrencies are just that - appealing. Institutional investors like Goldman Sachs are even coming out with products related to cryptocurrency which will bring in more profits for the crypto space.
The growth of crypto isn’t the only thing disrupting traditional industries but the technology as a whole is changing the investing game completely.
Private equity funds have a lot of money in them and currently, this money goes into small firms and startups which are hoping to scale in real estate. Investors put a lot of trust in fund managers to pay for said trust but with blockchain, there is a lot to be improved.
Blockchain can make the middlemen aspect disappear which would provide a trusted mean to invest individually and directly.
It was estimated by the global financial services business, Oliver Wyman that IT and operations costs up to $150 billion a year in capital. These fees are passed on to customers in the forms of administrative costs and front end loads. The technology behind blockchain is very transparent and has immutable recording and storage integrating in it so the potential is there for reducing the aforementioned costs by capitalising on public blockchains.
As reported by Forbes:
“The transparent ledger system, along with the immutability of any contract, document, trade that has been recorded in a block, drastically reduces fraud or other illegal activity in the investment sector”
This is now being more implemented by cryptocurrency investment groups and exchanges getting on board with Know Your Customer compliance. Compliance has been necessary for traditional investing for years now but with verification processes, the crypto space seems to have fallen behind.
Not anymore however as more updated KYC verification services are offered by Cryptonomica for legal cryptocurrency trading in Estonia.
What are your thoughts? Let us know what you think down below in the comments!