Cryptocurrency is becoming the next big thing in the Philippines. It could be for you too.
MANILA, Philippines — Depending on who you ask, either excitement or skepticism surrounds the topic of cryptocurrency. But as time has proven, necessity is still the mother of technological innovation and adaptation. Cryptocurrency, once previously dismissed as a fad, is now earning more credibility and trust.
Filipinos: Optimistic but still cautious
Just recently, the nation of El Salvador became the first country to adopt bitcoin as legal tender officially. Countries like Japan, US and the European Union have also recognized cryptocurrencies as legal, financial assets with value.
The Philippines has also exhibited increasing optimism about crypto. Banko Sentral ng Pilipinas (BSP) data shows that the volume of cryptocurrency transactions grew 362% year on year to nearly 20 million in the first half of 2021.
These transactions, according to a report, were worth P105.93 billion. The local demand for crypto is rising, so much so, that a recent study reported that the Philippines ranks fifth worldwide in terms of ownership, with 28% of adults saying they own cryptocurrency.
Nichel Gaba, founder and CEO of Philippine Digital Asset Exchange (PDAX), one of the leading virtual asset providers in the country, cites several factors that contribute to the growing popularity of digital assets.
First is the growing digital awareness and tech-savviness of Filipinos. He also mentions the crypto adoption of remittance companies, the popularity of play-to-earn games, and lastly, the increase in trust and regulatory certainty as the Philippines adopts a regulatory framework for crypto.
Attracting Filipino investors
Many traditional investors have also been won over to the crypto side. Digital currency enthusiasts believe that crypto investments could produce a new batch of digital currency millionaires, as in America's case.
In the Philippines, investors already hold up to 2% of their assets in cryptocurrency. Experts anticipate this to grow up to 5% in the next five years, given crypto's positive outlook.
But why is crypto gaining traction among investors building their wealth portfolio? Gaba underscores a few of crypto's merits:
- Transactional freedom: A peer-to-peer community manages crypto, not a centralized authority that strictly controls or monitors financial transactions. Every participant in crypto's decentralized system has democratic control and financial sovereignty of their assets.
- Safe transactions despite fewer interventions: By removing intermediaries, transactions that usually take days in mainstream financial institutions can now be done in a few minutes.
Without compromising security, these swift transactions are possible through blockchain technology and cryptographic algorithms that prevent a third party from accessing and gaining knowledge of your transactions.
- Long-term store of value. With some cryptocurrencies being limited or fixed in supply, investors believe they will gain value over the long term.
Additionally, investors see that no political body can dilute crypto's value through inflation, making it a resilient investment. You would not need to worry about hyperinflationary events, bank failures, and other economic fluctuations.
According to Gaba, there are solid arguments for people to join the cryptocurrency world from a portfolio-investing perspective.
"Because cryptocurrencies are very volatile, you can use them to enhance the risk-return profile of your portfolio as you add more volatile instruments uncorrelated to stocks, bonds, or anything else in your portfolio. There you get the benefits of diversification," Gaba said in a crypto webinar.
He added that the current state of the crypto market in the Philippines points to a situation where early adopters could get rewarded because as more entrants come into the space, we would see a lot of demand-side action.
Broadening crypto access in the Philippines
As economic situations continue to push people to be more strategic in finances and investments, adoption of crypto will significantly rise in the coming years. Still, there's a lot of groundwork that needs to be done to help crypto-curious Filipinos.
One of the biggest enablers in this is PDAX, which is a homegrown crypto-trading platform officially licensed by the BSP which helps Filipinos buy, sell and trade crypto.
Since its inception in 2017, PDAX has been on the move to bring more Filipinos into the crypto economy and drive financial inclusion and security through investments. Just recently, it has launched another game-changing service dedicated to Filipino crypto investors: the PDAX Prime.
The new PDAX service accompanies investors in their journey with digital assets by touching on three essential investor needs:
- Access: With this prime service, PDAX is giving Filipino investors direct access to cryptomarket, including the company’s over-the-counter (OTC) service where they can trade more tokens faster and with competitive pricing. Prime clients can directly access the PDAX Treasury Team to exchange digital assets using their preferred chat application. Prime gives customers access to 21 in-demand digital assets through web exchange, mobile app, plus over 30 OTC-exclusive digital assets,
- Support: Understanding how Filipinos can be extra prudent when it comes to finances and investments, PDAX Prime has a dedicated team, all knowledgeable and passionate about crypto, that clients can ask for more personal assistance and guidance on their crypto journey.
- Learning: Given the ever-changing market trends, Prime helps investors stay ahead of the curve by providing early exclusive access to crypto learning content, including basic overview of digital assets, in-depth discussion on trading, and insightful roundtables with crypto experts.
"We believe crypto investors in the country deserve to maximize their crypto investments and discover more opportunities to build their wealth. With PDAX Prime, they can do just that," Gaba said.
"Our current users can upgrade their accounts to enjoy the perks of PDAX Prime. We see this as an improvement to what we offer today and a benchmark for other, more innovative solutions we may come up with in the future," he added.
With over 4.3 million Filipinos currently holding cryptocurrency and becoming a fast-emerging investment option, chances are high that crypto could, indeed, be the next big thing in the Philippines, especially for Filipino investors.
As this possibility continues to take shape, PDAX will be at the forefront—solving accessibility concerns in cryptocurrencies and listing more digital assets to make decentralized products and services available to Filipinos.
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