Financials

The Rise Of Crypto Nomads

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<p>A nomad is a homeless person who moves from one place to another. With no fixed residence, they are open to exploring territories within their reach, which helps them earn money. These nomadic herds are unlike the usual people whose objective is primarily to settle in one place and grow their occupation and family &mdash; a concept detested by the millennials.</p><p>The millennials abominate a slow-paced life and sticking to one place; travel brings them excitement and exposure. As they want a fast-paced life, their idea of assets/investment has also changed. Digital assets, to them, seem much more lucrative than physical assets such as land and houses. Doesn&rsquo;t that sound similar to the nomadic behaviour, but in the modern milieu!</p><p>&ldquo;The crypto industry feels very much like the early Internet days of the mid-nineties. So much to build and so early, and so much opportunity to disrupt technological, traditional industries and make people's lives better,&rdquo; says Surojit Chatterjee, chief product officer of Coinbase, a cryptocurrency exchange platform.</p><p>Who does not get excited by the idea of accessing a global pool of capital!</p><p>&nbsp;</p><p>Shortly after blockchain technology hit the market, and cryptocurrencies (Ethereum and Bitcoin) came into existence, trading started, and crypto exchanges were established.</p><p>These exchanges were not regulated, unlike the existing stock markets and commodity exchanges. Entry-exit barriers were fewer, but they were highly volatile. As trading volumes started rising, it was realized that cryptocurrency would break global barriers. It would not be incorrect to state that the ease of access to global markets by way of cryptocurrencies resulted in the creation of &lsquo;crypto nomads&rsquo;.</p><p>Crypto nomad is a class of individuals who prefer borderless money. They can be classified into two categories. The first category is of crypto trading-savvy people, but unable to trade in their home country due to regulatory pressures/restrictions. Such people set up offices in locations (other than their country) which are pro-crypto and run the business from there. For example.</p><p>Sam Bankman-Fried, the richest person in crypto at an early age of 29, an alumnus of Massachusetts Institute of Technology (MIT), has moved his office to Hong Kong, and runs FTX, a cryptocurrency trading platform. He moved from the United States as regulators prohibited FTX from selling futures to general investors because they are very high on risk.</p><p>Bankman-Fried wanted to continue selling derivatives so he decided to move his base from California to Hong Kong. Changpeng Zhao, the Chinese Canadian founder of Binance, who is now working in Singapore, also belongs to the same category.</p><p>The second category of people are the ones who use crypto as a medium of exchange to travel and live internationally. Instead of opening bank accounts in each country, trading in crypto offers a similar liquidity that can be used for travelling and living internationally. They might need to invest in SIM cards in each country so that trading can be done easily.</p><p>Abhishek Bhattacharya, the co-founder of blockchain startup Whrrl, says: &ldquo;Crypto Nomads is a self-sustaining model wherein people can choose to earn/own cryptocurrency and spend it for their use. The model is simple, earn in crypto and pay in crypto.&rdquo;</p><p>It is convenient to hold crypto instead of routing money through a bank and incurring transaction charges. Bhattacharya believes that as more and more e-commerce sites start accepting cryptocurrency, the possibility of using it as a medium of exchange would widen.</p><p>We are seeing that the post-COVID-19 world is very different. Working from remote locations is the new normal. Amid this development, millennials and Generation Z are willing to take up assignments that let them work remotely and are open to exploring investment options that are global.</p><p>While COVID-19 resulted in travel restrictions, once these are lifted, the number of crypto nomads may increase. Bhattacharya says the changing job scenarios will be conducive to their growth.</p><p>Though cryptocurrency has not been assigned the status of legal tender, their acceptability in some countries such as Estonia as a digital asset makes them a popular medium of exchange.</p><p>The crypto nomads are thriving on the biome of decentralized finance which is an alternative finance ecosystem that breaks the barriers of traditional financial institutions. Since this resonates well with the fast-paced mindset of millennials, this could be the future of future international transactions.</p>
KR Expert - Kirti Sharma