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Ten years ago if you asked someone what their plans were for building wealth, their answer would have likely been investing long-term in real estate, the S&P 500, bonds, private equity, or hedge funds. Fast forward to 2022 and the dawn of DeFi has revolutionized the way people seek to build wealth for the future, with digital assets now providing a new alternative for investment opportunities.
Although generational wealth has historically been accumulated through traditional investment streams, a recent survey by CNBC Millionaire Survey found that 47% of millennials have 25% of their portfolio invested in cryptocurrency. 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 held more than 10% in crypto investments, with 83% holding none.
Evidence also shows that the widespread adoption of cryptocurrency has started to shift the way that the wealth management industry, including private banks, brokers, and wealth management firms, is adjusting to the rapidly evolving cryptocurrency landscape with pension funds starting to invest in crypto as well.
Although cryptocurrency has sprung into the mainstream over the past few years, the digital asset came 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, cryptocurrency has come a long way since its inception. By 2020, Bitcoin had reached many milestones, including smashing its 2017 record when it traded in the $20,000s for the first time. March of 2021 saw its value reach $60,000 and in April some of the world’s biggest brands were taking Bitcoin as payment. Come September, El Salvador had become the first country to adopt bitcoin as legal tender.
Many of the industries that have provided investors with substantial wealth have been those that were undiscovered or with untapped potential. A great example of this is growth stocks in tech companies flying under the radar like Shopify before they exploded in value. Investors that were able to recognize the potential behind this opportunity saw a massive return on investment.
Even with cryptocurrency quickly becoming conventional news, it still has room to grow, with experts predicting that bitcoin’s forecasted value is on track to compete with gold—potentially reaching $100,000 within the next five years.
The attraction to digital assets lies in many factors, a major one being that they are decentralized, i.e. there is no central authority or controlling entity that can tamper with or enforce any form of censorship upon your assets. Cryptocurrency is not the only digital asset born off the blockchain as NFTs (non-fungible tokens) have also seen a major uptrend in popularity over the last year. NFTs allow creators to sell art of all kinds—photos, video, or audio—that are all stored on the blockchain.
One of the frontrunners in the DeFi space is Baanx, a corporation building the infrastructure required for the mass adoption of digital assets. By helping consumers and corporations harness cryptocurrency, this fintech is aiming to change how the world interacts with their crypto investments and creating more use cases for their digital asset holdings. An example of this is the recent FCA approval that Baanx received for it’s Cryptodraft product that will allow users to borrow based on their crypto portfolio.
Founded in 2018 by a collective of innovators with a cumulative experience of 100 years in the banking sector, Baanx was built with the intention of tapping into the potential of digital assets and their inherent utility. Fast forward to 2022, and Baanx has already partnered with industry leaders including Ledger and Tezos. Moving forward, the company aims to replace traditional fintech services by bringing trust and transparency to the digital asset market.
Baanx’s infrastructure, powered by its native utility token BXX, allows users to send, spend and manage their crypto efficiently and securely, all the while receiving rewards for these activities and usage of the platform. The token rewards users with network-fee distribution based on the amount of BXX that is held and will allow users to enjoy Cryptodrafts in the future. Users can stake tokens for liquidity rewards, and earn BXX for staking stablecoins.
For those looking to build generational wealth, investing in digital assets provides a new, more lucrative, and more secure alternative to investments made from traditional banking. As companies like Baanx continue to push the envelope and create even more use cases for crypto investments, savvy investors are likely to benefit from early investment.