Bitcoin has taken its investors on a wild ride in recent months. Just this week, prices soared to more than $11,300, then fell back to around $9,000. Some experts speculate that the Bitcoin boom is a bubble, while others predict that its value could continue to rise. Whatever happens, there are those in the Southeast Asian tech scene who predict that cryptocurrency startups will be winners either way.
“Bitcoin appearing in the headlines due to its price has definitely driven a lot of attention and awareness to the space, even if it’s just simple curiosity about what Bitcoin is and how it can be used,” says Justin Leow, head of business operations at the Manila-based Coins.ph. “At Coins, it’s definitely a starting point for many new customers who come to our platform to learn more about the technology, and soon thereafter, how they can use it [to] save time and money on their everyday financial errands.”
Leow sees the Bitcoin frenzy as an opportunity to introduce the concept of cryptocurrencies to developing markets such as the Philippines, though he notes that the developed world is still in need of an education as well. “Cryptocurrencies still remain fairly niche even in the most developed countries, so to the extent that the general public can become more aware of them is a good thing,” Leow says. “However, I believe that it is also worth spending the extra effort in communicating that there are many uses and [a] much larger story behind Bitcoin aside from just a rapidly appreciating asset price, which I think people tend to focus solely on.”
Southeast Asia embracing cryptocurrency
Startups throughout Southeast Asia are embracing cryptocurrencies both as investment products and as cost-effective methods for offering services such as remittance transactions. Remittances contribute $26 billion to the Filipino economy alone, and overseas domestic workers often face steep fees to send money back home. But startups such as Coins.ph are championing the use of cryptocurrencies to reduce remittance fees and drive financial inclusion by creating crypto-powered services that are both affordable and accessible to a wide range of consumers.
Many companies are now exploring new uses of blockchain, the technology that undergirds Bitcoin and other popular digital currencies. These include improved travel protocols and enhanced cybersecurity systems, among other applications. Earlier this year, Satoshi Studios launched in Delhi as the first blockchain incubator in Southeast Asia, signaling that the technology’s presence in the region has only begun to be felt.
Luis Buenaventura, author of the book “Reinventing Remittances with Bitcoin” and chief technology officer at Bloom Solutions in the Philippines, says Bitcoin’s recent performance has been a major boon to crypto-startups. “Bitcoin’s crazy growth over 2017 has put it in the limelight in a way that no amount of marketing or customer education has been able to do,” Buenaventura says. “Everyday I wake up to messages from business acquaintances asking for advice on how to jump in before it’s too late. The sense of FOMO is very strong right now, and it’s an amusing thing to watch. As a community, we’ve basically gone from being an obscure libertarian experiment, to being a drug dealer’s currency, to being a mandatory component in any modern portfolio.”
FOMO is strong, but be cautious
But Leow cautions against startups rushing to use cryptocurrencies simply for the sake of trying to catch up with the trend, particularly in the developing markets of Southeast Asia. “I still think the most important thing that startups need to focus on is to make sure they’re solving a real pain point and not creating a product merely for technology’s sake,” Leow says. “That’s especially true in Southeast Asia, where there are big gaps in basic services that still need to be met, and people want to have those problems solved, regardless of how you go about doing it.”
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Although Bitcoin and other cryptocurrencies have recently begun gaining mainstream respect, Buenaventura, Leow and other Bitcoin investors and entrepreneurs can say they believed in the concept way back when. They’re also reaping the benefits of being risk-takers.
“The startups that have stuck to their guns all these years are being rewarded in a way that no one could have predicted back in 2014,” Buenaventura says. “Any company that trades Bitcoin or Ethereum is basically writing its own ticket right now, because the gains have been so huge. The fact that we saw this trend three or four years before anyone else did has positioned many of us as experts in this new field, so at the very least, I’m seeing a lot more speaking invites now.”