Cryptocurrencies have struggled as of late. The leading cryptocurrency Bitcoin, for example, now only trades at about $16,000-$17,000—a far cry from its high of $68,000 just about a year ago. Other leading cryptocurrencies such as Ether and Ripple have followed suit, notably decreasing in value compared to all-time highs from last year.
The struggles of the cryptocurrency world have only been exacerbated by the collapse of big crypto-adjacent companies such as cryptocurrency exchange FTX after a run on deposits exposed a deep hole in the exchange’s balance sheet. The exchange filed for bankruptcy earlier this month, causing concerns that the thousands of traders and investors who used the exchange would never get their money back.
The crypto winter has not spared Filipinos. After all, the Philippines ranks second globally in terms of crypto ownership, with 22.7% of internet users aged 16 to 64 owning crypto. Only Turkey, which registered 23.8%, beat out the country for the top spot.
Yet the country’s regulators are well aware of the potential financial fallout that the crypto collapse can bring. Recently, the nation’s central bank issued a memorandum slapping a moratorium on virtual asset service providers beginning September 1. This notably means a halt on the emergence of new crypto exchanges and other similar services. The move also comes as a result of the central bank promising stricter vigilance in the digital assets space.
Crypto-based play-to-earn game companies are also feeling the effects of the crypto winter. Axie Infinity, for example, once registered over 2.7 million daily active users. Today, this number is at just 760,000. The dip in interest is largely attributed to the devaluation of SLP, which is Axie Infinity’s most popular in-game currency. Axie Infinity players typically play the game to earn SLP and exchange them for fiat currency through crypto exchanges.
At its 2021 peak, one SLP cost about P17.50. Today one SLP now costs about ten centavos.
Axie Infinity’s troubles are perhaps the biggest indication of the crypto winter’s impact on Filipinos. Filipinos who had once relied on the game for an additional source of income during the height of the pandemic now find themselves struggling and even in debt after investing their resources into Axie Infinity.
Of course, there are still arguments that there are still use cases for crypto in the Philippines. Stock Smarts CEO Marvin Germo recently made the case for crypto by saying “It’s easy to lump cryptocurrency as one thing. The failure of one exchange is not a failure of crypto. It does not change the use cases of bitcoin, Ethereum, etc.”
Coins.ph CEO Wei Zhou echoed a similar sentiment and hoped that Filipinos would continue to drive Web 3.0 development, of which cryptocurrency is an integral part. “To really succeed in this, we need users, capital, and projects which will help our community to take off—and that’s what we’re seeing being built here in the Philippines,” Zhou said during last month’s Philippine Fintech Festival.
Finally, New York-based blockchain analysis firm Chainalysis noted that there is still sustained interest in play-to-earn games and cryptocurrency in the country despite Axie Infinity’s downturn. Chainalysis noted that the move to offer crypto through popular e-wallet apps like GCash and Maya also helped encourage more retail consumers into the crypto space.
Overall, there is no doubt that the cryptocurrency space is struggling. However, the asset is still popular enough among Filipinos to be able to absorb crypto winter’s impact. For devoted crypto enthusiasts hoping for crypto’s adoption into the mainstream, this may just be enough.