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OFR Insight Sharing is a new weekly program session presented by Old Fashion Research, joined by other crypto practitioners of multiple notable institutions and media presses. Every week, researchers of OFR Fund will share their research results in the crypto industry for the past week. Recaps take a look back at the sharing sessions and expose a larger audience to the most discussed topics recently.
This week, we are pleased to feature Felipe Montes, PhD, Co-founder & CEO at Kravata, who shared his insights on the accelerated adoption of web3 in the LATAM region. Kravata is a crypto-as-a-service infrastructure company that enables businesses in LATAM to offer crypto solutions in their own platform with a few lines of code.
The agenda of this week’s OFR Insight Sharing include:
Crypto adoption in LATAM;
Pain points/opportunities to build web3 in the region;
Current use cases of web3 in LATAM;
The LATAM web 3.0 market opportunities;
The above statistics have shown that crypto/digital assets have a relatively small market cap compared to other assets, such as real estate, debt securities, gold, and global equities. The average on global crypto adoption in 2021 was 3.9%. Digital assets are in an early and growing stage.
The curve showing total crypto users from 2014 to 2022 shares a similarity with the total internet users from 1990 to 1998. Among the U.S, Europe, and Asia, Asia has the highest institutional adoption of digital assets, while the U.S ranks the lowest among all three regions. Latin America and the Caribbean has the most retail clients among Asia-Pacific, Europe, Latin America and the Caribbean, Middle East and Africa, and North America. Building bridges between big players and Crypto will boost adoption in Latam.
The total AUM are expected to almost double by 2025 in LATAM, and today less than 1% are allocated in digital assets.
Graphs and stats above have shown that LATAM has a high web3 potential. The adoption of digital assets in Latam is exponentially increasing. This is a comparison across multiple dimensions on crypto users among Brazil, Columbia, Mexico, and Argentina.
The above pie chart and table have nominated four LATAM countries in the crypto adoption index. Russia and Venezuela have retained their positions and LocalBitcoin’s two biggest markets, but Columbia has climbed up to be the number 3.
However, pain points exist in the crypto adoption in the LATAM region. Although there is an opportunity of significant appetite from LATAM investors and businesses for crypto, a lack of infrastructure makes access to crypto hard and unreliable. The fiat/crypto liquidity in LATAM is low, with weak compliance and informality, and few options for large investments.
The lack of infrastructure means that there is a multi-billion dollar on/off ramp potential in LATAM. The FIAT-crypto bridges are still scarce in the tech ecosystem and crypto users are growing 100% per year. NFT and gaming, remittances, digital payments, and centralized crypto exchanges, are immediate applications that could benefit from on/off-ramp.
Kravata is a crypto-as-a-service infrastructure company that enables businesses in LATAM to offer crypto solutions in their own platform with a few lines of code. It proposes solutions to the existing pain points of crypto adoption in LATAM and seeks investment opportunities by developing a well-structured ecosystem, a dedicated roadmap, and an experienced team of experts.
***Special thanks to Felipe Montes, PhD, Co-founder & CEO at Kravata for presenting the content. Neither OFR Insight Sharing provides financial advice, nor researchers represent the final statement of OFR Fund.
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Old Fashion Research (OFR) is a multi-strategy blockchain investment fund founded in late 2021 by former executive and investment teams from the leading cryptocurrency exchange in the world.
OFR adopts a multi-strategy approach to capture the underlying value of Web3.0 and to build a full-cycle ecosystem to support new-generation crypto native entrepreneurs. OFR incubates promising startups, follows up with traditional venture capital investment and scaling support, and finally supports the projects if they wish to exit through a merger or acquisition.
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