Blockchain: The New Billionaire-Maker?
Ten years ago new money came from the Internet industry, what about the next decade?
For the first time ever, cryptocurrencies have produced seven billionaires on the Forbes list — and this is likely to be just the beginning.
When Bitcoin was introduced over a decade ago, it was supposed to revolutionize the global financial system. Sadly, the revolution has hardly come to pass. The cryptocurrency’s bumpy first decade has been marked by confusion, misjudgment, and wild price swings. With this in mind, investors and crypto enthusiasts have remained optimistic regarding its future. As such, cryptocurrencies in general may be at the center of the coming decade.
Increasing mainstream interest in digital currencies, led by institutional investors, has led to an increase in crypto billionaires. Especially now that digital currencies have set new price records across the board.
In light of this, is blockchain the next billionaire maker along with the real estate tycoons, social networking giants, and e-commerce billionaires?
How Are They Making Money?
Many startups in the space, including eToro, Kraken, Circle, BlockFi, and Ripple, have signaled their intentions to go public. Could listing be one reason for gaining a huge amount of wealth in the crypto space?
It can be recalled, Coinbase exchange launched its direct listing on NASDAQ this April 2021 for $86 billion, making it the largest direct listing in history. As a result, CEO Brian Armstrong and Co-Founder Fred Ehrsamenters entered the billionaires club.
Another reason could be the huge amount a crypto entity could get on the outcome of a fundraising round. As a testament to FTX’s success, one of the industry’s largest trading platforms, it raised $900 million in Series B funding, making it the largest venture capital round in crypto to date, valued at $18 billion.
For instance, venture capital firms like Andreessen Horowitz, which has a $2.2 billion crypto fund, could boost the value of leading private companies in this field to unprecedented levels. However, the biggest thing is not the funds themselves. The biggest thing is the partnerships, with traditional financial sector companies such as banks and fund managers.
Previously, Los Angeles-based competitive video game organization Team SoloMid (TSM) announced that it would change its name to TSM FTX, after reaching a 10-year $210 million deal with the crypto derivatives exchange.
Earlier this year, it bought 19-year naming rights to the Miami Heat’s arena for $135 million. FTX Arena will become the new name of the stadium for the 2021–22 NBA season. FTX also signed a sponsorship deal with Major League Baseball to become the first cryptocurrency exchange sponsor of a professional US sports team. An FTX logo patch was even printed to MLB umpire uniforms last July.
This crypto exchange is definitely spending big just to build brand awareness in the US, although many of its derivative products are not available to US citizens due to regulations.
Why? Because brand awareness increases sales by as much as three times. To make a business succeed, it seems to put more money out there to build awareness of its brand. Undoubtedly, when people know about it, its logo, and its marketing, they can sell more and engage more people. Thus, having these massive partnerships and brand awareness generates more money to any crypto companies and key people.
Blockchain in the Next Decade
Even though it’s a highly volatile asset, cryptocurrency can help investors build wealth, especially if they invest in digital coins over the long term or others may Hold On for Dear Life (HODL). And we only talked about the investors’ side, what more on the crypto exchanges owners, blockchain developers, and whale investors. The success of the CEX is still mainly in some pockets, while the potential of DeFi and NFT has yet to be realized.
Bitcoin itself is being seen as a portfolio play that has gotten traction in the last few months. It is catching up to stock trading as something that Americans are looking at for gaining wealth.
Billionaire investors openly discuss their cryptocurrency-related investments, while some large publicly listed companies, such as software company MicroStrategy, hold billions of dollars worth of Bitcoin on their balance sheets. Now, are you the next billionaire in the making?
Money is definitely in blockchain.