Crypto’s Expanding Reach
The era when cryptocurrency was solely the domain of tech aficionados is fading. Today, digital currencies are becoming accessible to a broader audience, including the younger generation. A prime illustration of this trend was the recent Aus Crypto Con event, recognized as the largest cryptocurrency gathering in the southern hemisphere. This two-day conference drew thousands of attendees, including families with children and university students. Ignacio Aguirre Franco, the chief marketing officer of Bitget, a cryptocurrency trading platform, shared insights during his presentation about the potential for children to engage with cryptocurrency in the near future. “We believe that many of today’s youth might establish a crypto exchange account even before they open a traditional bank account,” he remarked.
Engaging Young Minds through Gaming
The younger attendees at the conference found the allure of cryptocurrency in its entertainment aspects. Aavegotchi, a gamified cryptocurrency, showcased itself to the enthusiastic crowd. This unique digital currency allows users to dress up digital ghosts, referred to as gotchis, with various accessories, which can then be traded as non-fungible tokens (NFTs). According to their website, these gotchis are “trapped on the blockchain for eternity,” finding enjoyment through a variety of games. As of Friday afternoon, the Aavegotchi token, identified by the ticker “GHST,” was priced at 44 cents, though its value fluctuates based on gaming activity. Thalita Moreira and Beatriz Martins-Costa, representatives from Aavegotchi at the conference, emphasized that gaming can be meaningful. “Today, we see many children engrossed in games for hours without purpose, but with Aavegotchi, they are not just playing; they are learning about the future,” Moreira commented. “Every time they engage, they earn tokens and NFTs, which are essentially our gotchis,” she added. Martins-Costa summarized this sentiment by stating, “You’re having fun while also earning money.”
Concerns Arise Amidst Bitcoin’s Downturn
Bitcoin traders have experienced a turbulent few months, and following a weekend filled with crypto enthusiasm in Sydney, skeptics continue to raise concerns about potential risks. While Aavegotchi has no age restrictions, a company spokesperson advised that participants should ideally be at least 18 years old to engage fully in token-earning activities. “Engaging in trading tokens necessitates a cryptocurrency wallet and blockchain transactions, which we do not permit for users under 18,” they clarified. Aavegotchi is not the first cryptocurrency to adopt a gamified approach. Peter O’Neill from the UNSW’s School of Banking and Finance remarked that gamified cryptocurrencies have existed for nearly a decade, although their nature may not always be apparent. He pointed out that some cryptocurrencies are primarily speculative vehicles, citing the example of Pudgy Penguins, a popular brand where younger players unknowingly engage with crypto, potentially leading them to purchase cryptocurrencies as they become more invested in the game.
New Regulations for Digital Assets
In Australia, regulatory oversight of cryptocurrencies is still evolving. Recently, the Albanese government introduced new legislation in parliament aimed at digital asset investments. This bill proposes the creation of two new financial product categories: digital asset platforms and tokenized custody platforms, which will now be required to obtain an Australian Financial Services License. Financial Services Minister Daniel Mulino stated, “Currently, businesses can hold unlimited client digital assets without any financial law safeguards. Recent overseas collapses have highlighted the ramifications of insufficient oversight.” He added that the bill aims to establish clear and enforceable rules for businesses managing digital assets on behalf of consumers. Over the past month, Bitcoin has lost approximately 25% of its value, marking the steepest decline since June 2022, according to Bloomberg, emphasizing the volatility of cryptocurrencies akin to other financial markets.
Speculative Nature of Meme Coins
Dr. O’Neill highlighted the burgeoning popularity of cryptocurrencies, indicating that new coins are launched daily, with very few achieving success. He noted that while many digital currencies aim to enhance the financial system’s efficiency, numerous others lack any real value or purpose. “A significant number of cryptocurrencies are centered around memes and speculation, which exist in a different realm,” he remarked. These so-called “meme coins” are cryptocurrencies that serve no financial or technological function, primarily existing as speculative tools. “There’s even a platform that gamifies speculation, which is quite alarming,” he added. “Engaging in speculation on meme coins is essentially gambling, and I would not feel comfortable with that.” Aavegotchi representatives, however, contended that their platform differs from gambling, asserting, “Aavegotchi rewards strategic decision-making, creativity, and community collaboration, unlike gambling where outcomes are mostly random and the house always has an advantage.” They also recognized the risk of relying too heavily on play-to-earn models and advocate for responsible participation.
Innovative Uses of Crypto in Everyday Life
Beyond gaming, innovative applications for cryptocurrency are emerging. Jason Krishnan launched Shiba Wings in 2022, Australia’s first crypto diner, allowing patrons to pay for meals using digital currencies, and also offering its own unique token. “We established a framework for businesses to adopt tokenization,” Krishnan explained, describing it as a “community-owned franchise model” that includes a reward system, giving customers a stake in the business. Currently, he reports having 1.5 million token holders and is working on opening a new location in Melbourne.
Risks Associated with Simplified Trading
During the conference, Ignacio Aguirre Franco from Bitget noted that the reduced barriers to entry in the crypto landscape have made it accessible to many. In some instances, users may not need to execute trades independently on the Bitget platform, as they can utilize the AI assistant GetAgent to receive personalized strategies and conduct trades on their behalf. “The future of crypto lies in platforms that provide advanced tools for users,” Franco stated. He views these tools as educational resources that facilitate transactions. However, the Australian Securities and Investments Commission (ASIC) raised concerns about Bitget earlier this year, warning investors regarding its unlicensed crypto asset futures products. “These offerings can be highly leveraged, meaning a minimal amount of capital is needed from investors to control sizable positions in the underlying asset, amplifying both potential gains and losses,” the regulator noted in July. A Bitget spokesperson responded, stating, “We are actively seeking licenses in over 15 markets and are committed to working constructively with regulators to ensure users can safely access digital assets.” Dr. O’Neill cautioned that the lack of regulation in the cryptocurrency sector could lead to inexperienced investors facing significant risks. “Crypto investors often speculate on newly marketed cryptocurrencies, hoping for appreciation in value, similar to how investors approach initial public offerings of new stocks or existing shares. However, while IPOs have regulatory protections such as disclosures and audits, the crypto space lacks these safeguards.” He emphasized that the fluctuations seen in cryptocurrency markets are typical, but the challenge lies in interpreting these movements. “For Bitcoin, it’s difficult to pinpoint why its value can swing from $120,000 one month to $85,000 the next. Much of this seems driven by market enthusiasm and inflows, whereas with companies like Nvidia, we can assess their financial performance and value them in a more concrete way.”
