The surge in the value of numerous cryptocurrencies rekindled investor confidence in the Web3 gaming sector and incited a new surge of on-chain activity associated with the industry.
The anticipation of a potential spot Bitcoin exchange traded fund (ETF), according to Yat Siu, founder of Animoca Brands, has not only pushed up the price of Bitcoin but also reignited interest in blockchain games.
Siu told Cointelegraph at Hong Kong Fintech Week that the surge in the value of numerous cryptocurrencies rekindled investor confidence in the Web3 gaming sector and incited a new surge of on-chain activity associated with the industry.
“Token values are a way of confidence building in terms of users and utility. It’s not for the purpose of just having money, but it’s also to feel confident about what you own.”
“If an industry or a country isn’t growing, despite the fact that prices might be high, then people can lose confidence,’ Siu said.
Additionally, Siu explained that while it can be challenging to reduce investor confidence to a single metric, the most reliable indicators of growth and conviction in the GameFi industry can be determined by examining on-chain activity closely.
Investors should not evaluate the success of a project solely based on the price of its token, says Siu.
Rather, they should consider many factors similar to analyzing the various inputs in a nation’s economy.
“It’s not necessarily just the price of one particular thing. He added, “It’s the whole economic parcel,”
The data provides support for Siu’s claims.
Axie Infinity, the most popular blockchain-based game on Animoca’s roster, experienced a 14% increase in trading volume and a 50% increase in transaction activity over the past month, according to DappRadar data.
However, Siu maintains the view that the overall prosperity of the crypto industry remains fundamentally dependent on Bitcoin’s development, although numerous participants in the sector perceive their products as distinct and unrelated to those of their competitors.
“We’re still in a gold standard financial ecosystem where Bitcoin is the reserve currency of Web3. How Bitcoin is used, how it’s stored and who owns it, actually underpins a lot of the value in the crypto ecosystem,” he said.
Meanwhile, Siu is confident that the industry as a whole will benefit tremendously from the approval of a spot Bitcoin ETF product, which will also lend credibility to the sector and entice an array of new investments from conventional financial institutions.
Siu made a prediction that the cryptocurrency industry will ultimately surpass its dependence on Bitcoin as the de-facto reverse asset, similar to how the global economy gradually ceased to rely on the gold standard.
“As populations and economies grow, we need different systems that are more natural and efficient. To me, this is where we’re headed. But we’re still talking about a very small population of the world that is involved in Web3, despite it being over $1 trillion in size.”
“It’s just a matter of maturity in the market.”
