Is VeChain A Sleeping Giant In The Cryptocurrency World?
VeChain (VET) is a cryptocurrency that aims to enhance supply chain management by enabling manufacturers, suppliers, and consumers to track products’ quality and authenticity via sensors and radio frequency identification (RFID) tags. This cryptocurrency has a market capitalisation of $940 million as of 2020, but there is room to grow. For instance, in January of 2020, all cryptocurrencies’ total market capitalisation was just under $200 billion. By the end of 2020, this market capitalisation is over $600 billion. According to the World Trade Organisation, in 2018, the total value of all merchandise traded was $19 trillion. Bearing this in mind, if VeChain disrupted this market, its cryptocurrency value and market capitalisation would skyrocket.
The VeChain blockchain solution has a burgeoning list of users and partners. This list includes the likes of DNV GL, PwC, BMW Group, LVMH, Groupe Renault, H&M, and Walmart China, to name just a few. In December 2020, VeChain became the first blockchain service to achieve a five-star rating by TUV Saarland, a renowned European certification body. To further illustrate the potential of the blockchain platform and the cryptocurrency, consider its use-case for proving the quality and authenticity of products within a supply chain. Now consider that the total market value of the top-five ‘high fashion’ companies — Louis Vuitton ($32 billion), Chanel ($22 billion), Hermes ($18 billion), Gucci ($16 billion), and Cartier ($8 billion) — equates to $96 billion. Positively disrupting 3% of this value would equate to approximately $2.9 billion. The potential market value alluded to is a small portion of global trade, and potential adoption rates across the global population also shed more light on VeChain’s potential.
Current estimations of active cryptocurrency users fall in the ballpark of 60 million. China’s current population is over 1.4 billion, India is 1.3 billion and the African continent combined is over 1.4 billion. Hence, China, India and the African continent have a combined population of 4.1 billion people. If only 5% of this combined population were to adopt cryptocurrencies, this would be an equivalent of 205 million people. This number illustrates the potential value of cryptocurrencies, like VeChain, when applied to real-world use-cases.
