8 Thoughts Following 10 Days Living The Crypto Dream In Asia
I spend a lot of time traveling to our crypto communities. Year to date, I’ve been to L.A., Miami, S.F., Tokyo, Austin, & Paris, visiting CryptoMondays. So I went to Asia to attend CryptoMondays Shanghai, spend a week getting to know the crypto community there, and attend the Asian Blockchain Summit (ABS) in Taipei.
The 10 days was a revelation. I hadn’t had such a transformative trip since my world was rocked by Tel Aviv in 2015. Below are 8 thoughts from my 10 days in Shanghai and Taipei. While these thoughts may not be news to some, they’re new to me, and leave me believing that Asia is going to be a larger force in crypto than most anticipate:
1. Asia Is Full People Who’ve Seen The Crypto Light
I recently celebrated my two year anniversary of seeing the crypto light. One great thing about crypto is that you can go to any crypto conference or Meetup, and there will be others who’ve seen the crypto light. I call them “Fellow Travelers.” Others who share the vision that crypto can change the world, and make it a better place for billions of people. And Asia is full of Fellow Travelers. It’s amazing how much smaller the world is when you can travel the planet and have a strong connection with local communities wherever you go.
2. Asia Is Full Of Americans Pursuing Crypto Careers
I’m painfully aware of how regulatory unfriendly the U.S. is for crypto companies, but I was still surprised by how many Americans and other expats I met in Asia who moved there to pursue their crypto dreams. While some Americans had moved to work for U.S. firms, U.S. firms are struggling to compete, as they’re regulatorily restrained, and less in touch with the market. So the migration is both to Asia, and then to Asian, or Asian headquartered firms run by expats. While I’ve seen many expats in other emerging crypto markets (e.g. Berlin), given the massive crypto opportunity in Asia, it’s attracting expats from American, Australia, the U.K., and other countries on a greater scale than elsewhere.
3. Asia Crypto Is Largely About Crypto Trading/DeFi Today
While there’s other crypto-related stuff going, Asia is largely focused on trading/DeFi, where there is regulatory arbitrage relative to the U.S./Europe, and where investors have a greater appetite for risk. That’s why Hong Kong-headquartered BitMEX (with their 100X leverage) was able to generate $1T in trades in the last year while shunning the U.S. market:
In addition to the major players like Binance, BitMEX, and eToro, roaming the conference exhibition space at ABS yielded many interesting trading companies like FTX/Alameda Research (and their 3X leveraged token), HXRO (and their 5-minute binary trading game), and Coinflex (and their physically delivered cryptocurrency futures)
4. It’s Not Just Gambling, Asians Have A Higher Risk Profile For Investing
While Macao gets fewer visitors than Vegas, it generates 5X as much gaming revenue, because Asians love to gamble. But they also like to make money. And while the day the crypto market peaked in early 2018, I wrote a piece referring to the crypto market as “..The World’s First Global Casino”, I now have a more nuanced view.
The “efficient frontier” refers to an investment portfolio which occupies the ‘efficient’ parts of the risk-return spectrum. While there are certainly many Asian retail “investors” who are using crypto to gamble, the institutional players in Asia are simply comfortable playing further out on the efficient frontier. Taking bigger risks, and expecting greater returns. I think many Asians are playing a longer game than their U.S. counterparts.
5. Changpeng Zhao (“CZ”) Founder & CEO of Binance Is The Emerging Global Face of Crypto
I had no expectations prior to his presentation, but I couldn’t have been more impressed with CZ, the 42-year-old Chinese born, Canadian educated, billionaire head of Binance:
After college, CZ worked for the Tokyo Stock Exchange and Bloomberg Tradebook, before moving to Shanghai in 2005 to start Fusion Systems, which built HFT systems for brokers. CZ transitioned to crypto in 2013, working first for Blockchain.info, before becoming CTO of OKCoin. In early 2017, Zhao raised $15M in an ICO and launched Binance in July. Eight months later, Binance was the world’s largest cryptocurrency exchange by trading volume. And they continue to crush it, logging their biggest month in history in June.
During his presentation, CZ was poised, articulate, and transparent. The closest person in the U.S. is Naval Ravikant.
But CZ is a rock star in a way that no U.S. crypto exec is because Binance has scaled faster, and is executing a globally ambitious plan to be a one-stop shop for everything crypto. Binance has it’s own coin ($4.6B market cap), it’s own wallet (Trust Wallet), it’s own chain (Binance Chain), it’s own incubator (Binance Labs), and Binance Charity, which does great work, (e.g. the Pink Care Token). While others are retreating from the U.S., Binance is opening a U.S. based division, and recently hired a senior Ripple exec as it’s CEO.
The other major star of the show was American born, Hong Kong-based, Arthur Hayes, CEO of Bitmex, and the clear winner of the “Tangle in Taipei”.
6. Lambos Are Still A Thing In Asia Because Asia Is Rocking Like it’s 2017
While the excesses of late 2017/early 2018 are largely gone from events I’ve recently attended in the U.S. and Europe, there were Lambos at ABS:
Tron is well known for throwing money around, and ABS was no exception. There were posters touting the $4.5M winning bid by Justin Sun, the CEO of Tron, for lunch with Warren Buffet
And ABS was packed because crypto is still rocking in Asia:
7. WeChat Is The App to Rule Them All In China
I’ve read articles about how all-encompassing WeChat is, but until you’ve been to China, it’s hard to appreciate. When you meet someone in China, you connect by scanning their WeChat bar code. When you pay for something, anything, you pay with WeChat. In fact, the prevailing wisdom is that Libra is just Facebook’s next step in trying to replicateWeChat. To be the one app that rules them all.
8. The U.S. Is Retreating From The Global Stage As China Is Expanding It’s Global Footprint
As the U.S. is starting trade wars, sending tanks to the Mall in D.C., building concentration camps at the southern border, neglecting its infrastructure, and retreating from the global stage, China is expanding its global footprint through the massive “Belt & Road Initiative”. There is no political or economic panacea, and China certainly has its issues, but during my trip, I was struck by how the two countries going in different directions, just as crypto is about to have a massive global impact.
The bottom line is Asia is the center of the crypto trading universe and that’s where most of the money is being made. So that means that Asia is the center of the crypto universe today. To continue growing the ecosystem, Asia is going to need more digital assets to trade and/or they are going to need more ways to trade them. Asia is solving for those issues with IEOs and other initiatives.
Obviously, China has its own issues. But after two trips to Crypto Asia, it’s apparent that the U.S.’s long-held dominance in both tech and finance is at risk. It turns out that America’s exceptionalism had a half-life. And China and the rest of Asia is poised to fill the void.
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