This year has seen Australian institutions and retail investors increasingly open to crypto investment and transactions.
The Australian Federal Government is working on legislation to regulate the booming crypto market.
And the nation's biggest bank, Commonwealth Bank of Australia (ASX: CBA), became the first Aussie bank to provide crypto services to its customers just last month. It's a move many analysts believe other large financial institutions are likely to follow.
November also saw the launch of the first ASX listed crypto exchange-traded fund (ETF), which broke records for a new fund on its first day. While the BetaShares Crypto Innovators ETF (ASX: CRYP) doesn't invest directly in any cryptocurrencies, it does offer ASX investors exposure to the crypto-sphere by tracking the performance of up to 50 crypto-related companies.
With this rapidly changing picture in mind, the Motley Fool turned to Feroze Medora, director of trading at global crypto platform Gemini APAC, for his insights into what's happening, and what we can expect next.
Motley Fool: Really the multi-billion-dollar question is, is this the beginning of a country-wide mass institutional crypto adoption in Australia or just a passing fad?
Feroze Medora: Putting the number of institutions already involved in crypto aside, the growing percentage of Australian crypto investors alone can lead us to expect an even larger amount of institutional participation.
We're at the nascency of not only crypto as an asset class but the technology behind it as well. With the huge potential this space has to offer, it would be safe to say that this is not a passing fad but the beginning of a new era.
MF: What catalysts might speed up mainstream crypto use Down Under?
FM: As it is for the rest of the world, the biggest factor that would enable even further growth for cryptocurrency in Australia is regulatory oversight. While that might not currently be in place, the Australian government has proven itself to be open to establishing the right framework to regulate crypto.
I believe that the government is working hard to establish the right frameworks to set the standard for cryptocurrency firms in the country.
MF: If the Australian government greenlights digital tokens like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH), who would be the winners and losers in the current setting?
FM: Should more institutions adopt cryptocurrencies or the underlying technology, there is a fair chance of there not being any losers per se.
However, as we move closer towards a global consensus on crypto regulations, the only losers would be the non-compliant players who choose not to be responsible participants in the new digital economy.
MF: What's the biggest trend unfolding in the crypto market our readers should keep a close eye on?
FM: While I would advise every reader to conduct their own research, there is no denying that 2021 was a banner year for non-fungible tokens (NFTs).
This was an important milestone as prior to the NFT boom, blockchain technology became synonymous with cryptocurrencies, with many overlooking the potential of the technology itself. Thanks to NFTs, we saw a new use case for blockchain gain mainstream attention and one can expect to see more new use cases in 2022.
Additionally, this year we also saw more attention given to the environmental impact of cryptocurrencies. As a result, given the innovative nature of this sector, we are seeing more efforts being made to provide sustainable solutions.
Crypto and the environment is a conversation that will not, and should not, end until a solution is reached.
