Despite the financial volatility that has engulfed the global economic landscape over the last month or so, there seems to be no stopping the growth o
Despite the financial volatility that has engulfed the global economic landscape over the last month or so, there seems to be no stopping the growth of the cryptocurrency market, especially the nonfungible token (NFT) sector. This growth is highlighted by the fact that crypto’s total market capitalization has increased from around $800 billion to $1.8 trillion since the start of 2021.
Furthermore, a report from NonFungible.com released late last month reveals that sales associated with the NFT market ballooned to hit an all-time high of $17.6 billion during 2021, representing an increase of 21,000% from 2020.
The report further suggests that individuals invested in the NFT market raked in monumental profits worth a collective $5.4 billion last year. Thus, it comes as no surprise that a growing list of mainstream entities have continued to make their way into the crypto space.
Mainstream firms explore crypto tech
On March 2, Nomura Holdings — one of Japan’s largest financial firms, with about 70 trillion yen ($593 billion) in assets under management — announced it would be launching a new digital assets wing to look into opportunities presented by the crypto market, particularly NFTs, and to help its clients increase their exposure to and use of digital currencies as well as other related services. The company — which deals in retail, wholesale and investment businesses — announced it would restructure its Future Innovation Company and begin updated operations in April.
Several major firms have made similar moves in recent months, including e-commerce giant Rakuten, which announced the launch of its very own NFT trading platform, dubbed Rakuten NFT. Japan’s largest financial conglomerate, Mitsubishi UFJ Financial Group, also revealed it would scrap its blockchain payment project to focus on the burgeoning stablecoin market.
Specialized crypto wings are fast becoming the norm
Christopher Temme, chief financial officer of cryptocurrency exchange bitFlyer USA, spoke to Cointelegraph about whether the trend of mainstream firms creating dedicated crypto departments will carry forward into the future.
In his view, companies like Nomura creating digital asset-focused business units comes as no surprise, as the clients of most multinational corporations are pushing for this kind of exposure, adding:
“What’s more interesting is that Nomura is exploring NFTs specifically. Their rapid growth and adoption in the creative/collectibles space have been the perfect testing ground to harden the technology in preparation for digital ownership of ‘real’ property, and the communities that’ll be formed around it as a result.”
Temme also noted that while Japanese financial institutions have traditionally been quite conservative in their financial outlook, the fact that Nomura is exploring the crypto sector via a dedicated wing serves as a strong indicator of what’s to come in the near future.
Similarly, Takaaki Kato, head of global sales and trading at bitFlyer, told Cointelegraph that, as a general rule of thumb, mainstream companies tend to follow a herd mentality — meaning that when one major player creates a department to explore crypto, it’s only a matter of time before others follow suit.
Temme’s and Kato’s opinions were also echoed by Jimmy Yin, founder of iZUMi Finance — a platform providing liquidity as a service — who told Cointelegraph that the creation of dedicated crypto wings will likely become a norm as we move into an increasingly decentralized future. However, he made note that there are certain things companies need to take into consideration before taking major steps in this direction:
“We can see massive growth in NFTs and crypto-asset users in general over the past year. That said, multiple factors, including legalization, have to be taken into consideration, especially when it comes to advertising to mass citizens. With the current geopolitical mayhem going on, crypto is seen as a challenge to what’s been considered stable.”
In Yin’s view, the trend will gain momentum if crypto’s social acceptance continues to grow, especially as a holistic technology that allows for a multitude of benefits — not just as a payment tool. “Whether crypto is adopted as a social norm is not up to these business giants but the common interest of citizens,” he said.
The numbers don’t lie
In mid-2021, Bank of America established a specialized team focused on crypto and digital asset strategy, citing growing customer demand and other associated factors for the move. In a study released by the firm later that year, analysts noted that the digital asset market had become too large for any forward-looking company to ignore, with crypto having reached a $2 trillion market capitalization in 2021 — and boasting over 200 million users.
The researchers further noted that crypto-based digital assets could…
cointelegraph.com