Theme 1: Digital Asset Economy in 2022

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2022 Snapshots Theme 1: Digital Asset Economy in 2022

2.1tn

Total cryptocurrencies market cap (US$, 17/1/2022)

880%

Rise in global crypto adoption, y/y (Aug 2021) ▪ 2022 will see the increasing convergence of the ‘crypto’ and ‘traditional’ economies.

▪ Participants will constantly push the envelope of innovation which will lead to new use cases and drive mainstream adoption.

▪ 2022 will see multiple stakeholders (policymakers, investors, executives and participants) recalibrate their risk measurements as they factor digital assets into their mandate.

Core thesis

Digital assets have demonstrated the disruptive potential to solve real-world financial issues and democratize access to financial solutions to the unbanked population. Proven digital asset use cases include banking, payments, wealth transfer and financing services at the grassroots level.

Significance and Disruptive Impacts

The narrative around digital assets will broaden to encompass various demographics and mainstream use cases, spanning entertainment, commerce, financial services etc.

Expectation for 2022

1. Crypto and traditional economies converge 2022 will see the increasing convergence of ‘crypto’ and ‘traditional’ economies and partnerships between traditional finance and crypto-native firms. There is a trend towards a better working relationship between both ecosystems.

2. Breadth and depth of market reach will further pick up 2022 will see emerging markets further embrace digital assets for the benefits of financial inclusion and empowerment. New digital asset use cases will democratize access to financial services for unforeseen demographics, translating into an exponential rise in digital asset adoption. (See Interview with Ben Caselin, AAX, Interview with Kevin Loo, New Vision , Interview with Daniel Lai, Crypto.com)

3. Reinforce necessity of digital asset exposure Digital asset adoption will accelerate in 2022 to the extent that it is necessary to participate in the asset class. Primary drivers include higher risk-adjusted returns, lower correlations and inflation hedging benefits. (See Interview with

Ben Caselin, AAX, Interview with Gordon Crosbie-Walsh, EquitiesFirst)

4. Recalibrating risk measurement Digital assets will fundamentally change how decision-makers view risk and reward. As digital assets get unfolded into the fabric of the economy, stakeholders – including policy makers, executives, investors and the public –will measure risk using a new methodology. (See Interview with Emil Chan, ACMCP)

5. The ecosystem will strengthen as innovations address shortcomings More resilient chains, new use cases and robust cybersecurity solutions will drive mainstream adoption in 2022.

6. Digital asset innovations will continue to disrupt traditional business models The strategies that TradFi institutions undertake range from competition to coopetition. Blockchain is a starting point for yet unknown use cases. (See Interview with Daniel Lai, Crypto.com)