David Gobaud
CEO & Founder
Passfolio
/
Startup Contributor

Technology Has Changed Investing, Ushering in the World of Crypto

By David Gobaud | Tue, 05/03/2022 - 10:00

The way people invest has changed dramatically over the past decade. With the emergence of cryptocurrencies, it’s likely going to change even more. My company, Passfolio, is one of many on the precipice of these changes.

Today, most people can now invest within a mobile phone app. Companies like Robinhood ushered in this era of mobile-based, fee-free trading — in the US, at least. We’re focused on countries that don’t usually invest in the US markets, like Mexico.

This is getting a lot of people interested in investing. Before — a long time ago — people who wanted to invest needed to use a stockbroker, an actual person who traded on behalf of investors. Then, in the late ‘90s and early 2000s, stock trading became digital, something people could do on a computer via the internet and through an online brokerage.

Today, it’s all about mobile. With mobile, that means access. Anyone with a mobile phone can now be an investor. Everyone can be an investor. It’s an exciting time to think about the possibilities for people and investing. Many people are investing now for the first time because before it was the purview of the rich, or for people with certain privileged access. Now, anyone can simply install an app on their phone.

The metrics site Statistica notes that there were 14 billion mobile devices globally in 2020. By 2025, it estimates there will be more than 20 billion, almost a 30 percent increase in the number of mobile phones for a global population of 8 billion people!

There are many more mobile devices than there are people in this world. That’s a tremendous opportunity for people anywhere in the world to get access to investing if they want to. More and more, people want to, because of the benefits investing can bring to their lives.

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Number of mobile devices worldwide, 2020-2025. Source: Statistica

When users deposit with our Passfolio app on their mobile phone, for example, they get access to US dollars — our goal is all about investing in the US. Right now, the rate between the Mexican peso and dollars is favorable. One US dollar is worth MX$20.15 at current exchange rates. It has been about a year since the rates have been so favorable.

With so many geopolitical concerns going on around the world, concern about currency inflation is high. The US dollar, however, has usually remained relatively stable. Because of this, we’re seeing a use case for our app as an investment in US dollars. A lot of people don’t realize that the US dollar is an investment in and of itself. But it is. We see it ourselves every day.

For Passfolio, we focus on Brazil, Nigeria and Mexico. Offering US stocks in Brazil and Mexico, in particular, actually matches up well with the US stock market, which operates in similar daytime hours as these countries.

Crypto is another animal altogether, however. It’s a 24/7 active market. And there are many different cryptocurrencies, depending on a person’s interest. Stocks are certainly a great way to invest but so is access to cryptocurrencies. The crypto market has around a $2 trillion market capitalization but it’s been as high as $3 trillion in the past, according to data aggregator CoinGecko.

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Cryptocurrency market capitalization the past five years. Source: CoinGecko

It’s a volatile market but crypto is a great long-term investment for younger people. There is some concern about where the market will go in the near-term, as regulators are still trying to figure out how this is going to work long-term with traditional markets. It will get worked out over time and there’s a lot of innovation going on there.

Investors in crypto these days have many choices regarding what to put money into. There are things like bitcoin, which companies are now using as a reserve asset alternative to diversify from cash. There’s ether, the native currency of Ethereum, which allows software developers to build applications like lending, exchange and even non-fungible tokens, or NFTs. There’s the privacy sector, with assets like Zcash, which allow users to transfer blockchain-based assets with confidentiality.

It’s exciting when you think about all this convergence of technology enabling investing. It’s important to remember that investing can really change people’s lives. It enables people to empower themselves, achieve goals and provide the ability to retire whenever it’s time to stop working.

Mobile phone technology and cryptocurrencies help enable that, and it’s really making a difference in people’s lives. That’s why we’re doing this: to provide access. As an American, I have this access, so why shouldn’t anyone else? That’s what’s interesting about this work and why we do it. It’s really important to help people and really gratifying when you see people achieve their goals.

Photo by:   David Gobaud