Market valuation of cryptocurrencies have tanked by more than 70 per cent during the past eight months. Meanwhile, popular crypto Bitcoin plunged below $20,000 at present from over $65,000 in November 2021. But how long will this bearish trend continue or what are the available investment options in the space? To get answers of all these questions, Business Today caught up with Ray Youssef, co-founder and CEO of Paxful, a P2P exchange, to understand where cryptocurrencies are headed. Edited excerpts:
Business Today (BT): Why cryptocurrency market is looking uncertain at present? How do you see the trend going ahead?
Ray Youssef: People all around the world are worried about inflation and a potential recession--we’re seeing that play out everywhere. While this is a stressful time, it’s also an opportunity for companies in the space to zoom out from the short-term focus and put real effort into how and why Bitcoin creates an alternative financial option for many people. It’s time to build platforms that are real and empowering–that make it easier for everyone to take control of their financial future to remit money, make international payments, or even collect donations in hostile territories. If we focus on just the price of Bitcoin, we’ll lose focus on how it can bring millions of people into the global economy. We do not want to downplay what’s happening in the market, but we will not sleep on this opportunity to [correct] the direction of the industry.
BT: Government has imposed a 1 per cent TDS on crypto from July 1. How has it dampened volumes?
Youssef: We have not seen any major changes on our platform.
BT: Why there is a need for peer-to-peer (P2P) crypto exchanges. What are the benefits of P2P exchanges?
Youssef: Peer-to-peer platforms allow individuals to buy and sell with real people. We have over 450 payment methods available on the platform, providing access to almost any financial network in the world. There’s no need for a bank account, so buying and selling on the platform is accessible to anyone regardless of gender, location, or income. And unlike a traditional bank, transactions can be made 24/7 with greater speed and lower fees. It’s a solution for the unbanked and can provide access to the global economy.
BT: Do you see consolidation in cryptocurrency exchanges?
Youssef: We do not have any specific insight into how other businesses are consolidating. We hope this shift acts as a reset for the industry. This is a time to focus on what is most important -- understanding the needs of people and providing them with real-world solutions. Consolidation is inevitable but Bitcoin is here to stay and now it’s time to focus on mass financial education.
BT: How different industries can use cryptocurrencies in their operations in India?
Youssef: India is one of our fastest-growing markets and our goal is to educate, train and inform people about the adoption of bitcoin. Bitcoin enables businesses to make quicker transactions without dealing with traditional financial methods. For example, Shubham, a tea shop owner in Bengaluru, started using Paxful to receive Bitcoin payments from his customers. In a neighbourhood surrounded by tech companies and a young demographic, he sees over 100 customers a day. Shubham is a great example of how businesses can begin to incorporate Bitcoin into their business model.
BT: How to make money from cryptocurrencies? Should one stay with cryptocurrencies for the long term or is trading the way?
Youssef: Bitcoin can be used for many things such as arbitrage, e-commerce, wealth preservation, and entrepreneurial ventures. We have a user who started his business with just $3, selling game items for a 10/20 per cent margin as part-time earning. Today he is the largest trader on Paxful with over $60 million volume. Just by doing arbitrage, he has built his work in just three to four years. Starting small doesn't matter, but wisdom and strong ambition can make anything possible.
BT: Without giving any name, which type of cryptocurrencies do you think can give a healthy return to investors?
Youssef: For me, it’s not about Bitcoin as a speculative asset class, but it’s about showing people the true use cases of Bitcoin and its intended use as a means of exchange. The emerging markets demonstrate that bitcoin has the power to connect the unbanked and underbanked to the larger global financial ecosystem.
Copyright©2022 Living Media India Limited. For reprint rights: Syndications Today