Regardless of cryptocurrency’s growing adoption rate over the past year, many people still look at it as a kid’s playground. To some, it is little more than the poor man’s financial market. With a market cap of about $2 trillion, that is far from true. It is, however, symptomatic of a bigger problem: the disconnect between the traditional financial markets and the crypto market.
With crypto becoming an increasingly hot topic and financial markets in turn also seeing massive inflows on the back of the pandemic’s economic fallout, a bridge between the two is needed. A small niche has been carved out and whoever takes advantage of it the best will stand to gain enormous profit and access to a yet untapped consumer base. While many companies seem to be trying to fill that niche, quite a lot of them have failed or come to a halt. Although the space is there to be filled, the regulatory hurdles and complexity in merging technology and financial markets have proven to be too much for many to handle.
The latest competitor to the arena is the company, Finhaven. It is a Canadian-based, financial company specializing in financial services and technology. Of particular note here is their contribution to the capital markets – Finhaven Private Markets. Finhaven has historically been one of the champions for digitization of the financial markets as a tool to increase efficiency and this new venture is in line with that.
Moonshot Solution to woo Investors?
With ongoing crypto adoption being stalled by regulation and unfamiliarity in many countries, it seems Finhaven has devised a solution where people more familiar with the traditional financial markets than crypto markets can find good middle ground. Finhaven Private Markets will allow consumers to directly use cryptocurrency to acquire digital securities.
To this effect, the company has developed two things. First, is GatewayFH, a platform that they hope will effectively facilitate transactions between customers on a peer-to-peer basis. Second is their token, FINToken, which users will be able to use on the platform for trading securities and acquiring benefits unique to holders.
It remains to be seen how well this new development will be taken by the masses and more importantly by companies looking to raise capital but for those willing to take the chance on it, there will be quite a few benefits.
Source Of Capital
It is no secret by now that the crypto world has received a huge influx of investors over the past few years. The slow permeation of crypto into the mainstream has caught the eyes of the masses and many million-dollar companies. This influx of people has also brought with it a massive amount of capital and the total crypto market cap stands above $2 trillion currently.
All of those tokens sitting in wallets on the blockchain could become a pool for companies in need of capital should they be willing to venture into the crypto market to source for it. Finhaven’s platform could very easily open up an entirely untapped source of capital for companies.
Peer-To-Peer Trading
For retail traders who have previously been stuck with untradeable stock on centralized exchanges, Finhaven could provide a solution for the future. Rather than trading on centralized exchanges where you might be stuck with illiquid assets, you will be able to directly contact people looking to trade those assets with you in exchange for another. Peer-to-peer trading comes with the added incentive of being able to directly negotiate prices with your prospective buyer.
Personal Control Over Your Assets
Along with its token and platform, the company has also developed Finwallet, a wallet that will serve as ground zero for your entire portfolio. Now, rather than being saddled with the problem of managing multiple assets on multiple exchanges, you can own a wallet that shows you an overview of your entire portfolio.
Conclusion
Cryptocurrencies, like any other financial instrument, are riddled with risks. Some cryptos are especially volatile depending on market conditions and an unfortunate market swing could leave you with tokens you have no option but to sell at a loss.
Regardless, hedging their crypto against digital assets will likely lead to a lot less volatility than has been historically present in the crypto sphere but as with all other things financial, personal research, and experience are best. What can be said about Finhaven however, is that they seem to have filled a niche that could be very profitable for both them and their customers if handled correctly.