Young startup aims to make cryptocurrency safer and more accessible.
Recent developments in the international banking sector – the bankruptcy of Silicon Valley Bank and Signature Bank, the acquisition of Credit Suisse by UBS, and the sudden drop in Deutsche Bank’s stock prices – have given one particular investment class a renewed shine after a period of poor performance: cryptocurrencies. How do these developments relate to each other?
Interestingly, it was the supposedly secure government bonds, with their enormous devaluations, that triggered a number of banks to wobble in a short period of time. Along with drops in prices of banking stocks, a well-known risk for every investor, the takeover of Credit Suisse also came with an unpleasant surprise for capital providers. Investors in CoCos – corporate bonds that can be converted into shares – seem to be losing their entire investment of 16 billion euros due to the intervention of Swiss authorities. This type of loan is more risky than typical corporate bonds, but it is unusual for it to be subordinated to the shareholder in the event of a company’s collapse.
According to crypto supporters, these types of events are proof that coins like Bitcoin and Ethereum will become a permanent part of our future financial system. Because of the decentralized nature of these cryptocurrencies, agreements cannot be suddenly changed as they were during the takeover of Credit Suisse. What is unique about cryptocurrencies like Bitcoin is that someone can hold it themselves without counterparty risk, such as when a bank goes bankrupt. For this reason, and due to the limited quantity of Bitcoin, it could serve as a safe haven according to these crypto advocates, just like gold.
Young entrepreneurs in the crypto sector who have always believed in crypto, even after the sharp drop in prices last year, are the founders of blunded, a fast-growing Dutch crypto platform.
The platform was founded in 2021 with the aim of making crypto easier and safer for people. The main driver for this is the abuses that have arisen over the years at centralized parties like Mt.Gox, Quadriga CX, and more recent events at Celcius and FTX, where many people lost a lot of money. The goal of blunded is to provide starting investors with safer and easier access to the decentralized crypto market. The company’s main message is to not store your crypto with a third party, but to store it safely yourself.
According to co-founder Arnoud van der Meulen (Economics, MSc), the next two years seem to be the period in which Bitcoin will truly be tested: “Gold seems to be fulfilling its promise completely in these times of unrest, and has been trading at record highs in Euro for some time now. Bitcoin appears to have found its temporary bottom after a year of price declines. For the first quarter, Bitcoin is even the biggest gainer in the financial markets, with a gain of about 70%, despite all the turmoil in the financial markets.”
Co-founder Jean-Paul van Houtum quickly adds: “It should be noted that Bitcoin is still more than half less valuable than at its peak, but you can certainly see that the number of new Bitcoin addresses is increasing again in the first quarter of 2023.”
