The coronavirus changed the way we live and work almost overnight. It brought about negative impacts on the economy, businesses, and even individuals. Many companies closed down, and millions of people were left unemployed. Apart from its global impact, we already know that the crisis is expediting an already growing trend on digitalization.
From online shopping to drone delivery, virtual meetings to automated productions, the traditional services are moving towards digital, pervading through different sectors and activities. Digitally inclined businesses are acclimating to the ongoing crisis thrivingly, and others are still trying to keep up with the changing environment.
For governments looking to push economic recovery after the crisis, supporting digital competitiveness is possibly the key. Investors are encouraged to venture into digital investments to help in the improvement of the economic climate.
Investing in The Digital Space
There is significant evidence that foreign direct investment (FDI) to the digital space can bring technology, knowledge, jobs, and growth. For developing economies, FDI is also often their most significant source of investment. Traditional businesses venturing into digital investments are trying to adapt to the current environment to be close to customers and open new markets.
“Evidence shows that foreign direct investment can provide many benefits to host countries, including productivity improvements, better jobs, and knowledge transfer. Further, it can serve as a vehicle for the transformation of domestic production and better integration with global value chains,” says a research paper published by the World Bank Group.
The digital economy generates different new business opportunities. For example, social media, e-commerce, and payment platforms would not exist if not for the internet. Governments that embrace such new businesses create an environment where companies in the digital space to thrive and actively promote the digital economy are likely to have greater success in attracting investments.
Apart from new business models, investing in digital space can change the way we do business. Local enterprises may shift to various digital services to adapt to the changes brought about by the coronavirus. Adherence to these changes is crucial in achieving investments to help rebuild the economy through digital space.
An excellent example is TimeCoinProtocol (TCP), a platform that facilitates the development of any form of sharing economy service. TCP allows users using sharing economy apps to move from one service to another while they keep all their private data and the reputations they have earned. The first two dApps expected on TimeCoinProtol are eSportStars And TimeTicket.
eSportStars lets esport players, streamers, and fans find other individuals interested to play, buy, and sell competition tickets. The dApp will allow users to earn money by playing games and has already seen over 300,000 registrations before launch.
The platform is available in Japanese, Chinese, and English and aims to tap into the rapidly growing esports market. To achieve this, eSportStars has employed the services of professional esports teams, including JapanKillerAngel, the first professional team in the field that specializes in games like Valorant and PUBG. Other teams include GameWith, specialists in Super Smash Bros and Fortnite, Tekken players, and TeamYAMASA.
Another sharing economy dApp set to be built on TCP in the near future is TimeTicket. The platform will allow users to use ‘time tickets’ to tokenize their business hours. These tickets can be bought and exchanged for various services on the platform such as photography, consulting, relationship counseling, programming, coaching, fortune-telling, and even offering financial advice.
The platform has already tried its services in Japan through a web version of the app and experienced overwhelming success. There are over 250,000 users in the country who are utilizing the TimeTicket web version to share their skills, with some claiming to make as much as $10,000 a month.
Another thing that should be considered in helping the economy recover is by investing in alternatives such as digital assets. It can help create potential income streams, especially for those affected by the increasing unemployment globally.
Digital Asset Investment
“As the economy is becoming more digital, the role of digital assets in investment decisions will also grow. A new alternative asset market can provide valuable contributions to portfolio allocation: crypto-currencies display high expected returns with large volatilities and at the same time remarkably low correlations with each other and with standard financial assets, allowing for diversification benefits,” according to a discussion paper published in Humboldt University, Berlin.
When it comes to cryptocurrencies, investors can consider DeFi products. DeFi is the hottest sector within the crypto market right now, and over the past few months, the DeFi market has exploded with over $2 billion in Total Value Locked. For those that hold substantial amounts of digital assets and don’t want to sell them, they can lend them on platforms like Kava, Compound and Maker, and earn interest. To choose the right DeFi platform for this activity you can use defiprime.com to analyze the best projects available.
Investing in digital assets offer means of passive income, perfect for those who lost their jobs due to the crisis. Those who are eyeing for other income streams can venture into digital assets, especially if using the right strategy. Certain low-risk strategies do not require much work from investors, such as arbitrage.
“Arbitrage is the buying and selling of the same asset from different exchanges. Instead of depending on the investment vehicle’s market value, arbitrage takes advantage of the price discrepancies between exchanges. This strategy works well, especially with volatile markets, which can be caused by the recession,” says Andre Gerald, CEO of Prance Gold Holdings, a FinTech-driven investment platform.
Through investment in digital assets, anyone can help in the recovery of the economy. It also is a great way to generate income amidst all the unemployment trends. With the right strategy, investing in digital assets can be profitable.
“What arbitrage programs do is to initiate a trade instantly once an arbitrage opportunity is spotted. This offers traders reduced risks and increased profitability of their digital assets,” serial entrepreneur and seed investor of Prance Gold Holdings Jeffrey Guo said.
The current crisis has shifted the way we live our day-to-day lives. It has also opened up a lot of opportunities in the digital space, which can help recover the economy. One way is to promote the digital economy through investment in businesses going or already in the digital space. Another way is to invest in digital assets, which can help ease the economy by providing additional income streams.