Exclusive Interview with Animoca's Yat Siu: The U.S. Crypto Industry Has Already Won, Hong Kong Government Policies Enhance the Dignity of Practitioners

Interviewee: Yat Siu, Co-founder and Executive Chairman of Animoca Brands

Interviewers and Authors: Wendy, Karen, Foresight News

If two years ago at Consensus, NFTs had become an undisputed narrative mainstream, then after the downturn of the past year, NFTs have almost turned into a relatively quiet, niche presence at this year's Consensus conference.

In this fluctuating market, Animoca Brands, a local Hong Kong project heavily invested in the NFT space, is also inevitably affected. However, as the co-founder and executive chairman of the project, Yat Siu remains confident. Recently, he not only personally bought 10 Bored Apes and various other NFT assets but also made several "bold" statements, firmly optimistic about the development of NFTs, Bitcoin, and the entire crypto market.

During the Consensus conference, Yat Siu accepted an on-site interview with Foresight News reporters, providing further explanations for his statements and actions, and responding to changes in global Web3 regulatory policies.

In his view, "Web3 is a way for us to redraw and reshape capitalism." Once billions of people can own crypto assets and have the potential for asset appreciation, it will drive a significant rise in Bitcoin prices and the overall value of the crypto market.

As a Web3 entrepreneur and investor based in Hong Kong, Yat Siu believes that the Hong Kong government's support for the crypto industry not only provides a good policy environment for innovative companies in this field but also enhances the dignity of all industry practitioners. The current political discussions and some policy adjustments have also made it so that regardless of the final outcome of the U.S. elections, the entire crypto community has already won.

The NFT Network Effect is Still Early; Gaming is the Key Driver

Foresight News: First, could you explain the reason behind your recent large purchases of Bored Apes?

Yat Siu: About three weeks ago, I bought 10 Bored Apes. At that time, the price of Bored Apes was quite low. The reasons are, first, because I am a super fan of Bored Apes. Secondly, I felt that Bored Apes were going through some tough times, and I strongly felt that we owed something to Bored Apes—not just Animoca, but the entire community, because Bored Apes made NFTs mainstream and made the world aware of NFTs. This purchase is also a way to express our gratitude to the community. Of course, another reason is that having 10 Bored Apes means I can stake them, and ApeCoin has some value.

After my purchase, the price of Bored Apes went up a bit, so that's nice. I don't plan to sell them. Many people also started to think that my actions were correct, and others began to buy Bored Apes as well.

I have bought many NFTs, not just Bored Apes.

Foresight News: Including the recent 10, how many Bored Apes do you own in total?

Yat Siu: I haven't counted, but I have about 20 to 25.

Foresight News: The entire NFT market seems a bit quiet right now. While some related projects believe there is hope for a rebound, do you really agree with that sentiment?

Yat Siu: In the first quarter of this year, NFT sales exceeded $3 billion. So, while we are not at the peak now, it's not bad—there are still about $700 to $800 million each month—it's not as terrible as people say.

NFTs are carriers of digital culture. This means that whether it's Bitcoin Ordinals, Ethereum ERC 721, Solana (NFTs), or other types of NFTs, they represent the value of the community in cultural and ecosystem growth.

In the physical world, when you make money and want to showcase your social status in the traditional world, you might buy a car, a bag, a house, or perhaps a yacht or a private jet. In Web3, in the digital world, NFTs serve a similar purpose. If you make money in the Ethereum ecosystem, owning a Bored Ape is part of that sense of honor; in the Bitcoin ecosystem, it's Ordinals, etc. You will notice that each ecosystem has specific types of NFTs because you need a way to showcase your closeness to the community and your social status. So for me, as Web3 develops, NFTs will also evolve.

The second reason NFTs don't seem to grow as rapidly as other tokens is that their network effect is still in the early stages. This is because the interoperability of NFTs—though permissionless—has not been widely adopted, as people have not built those applications yet. The network effects of tokens are ubiquitous, allowing cross-chain assets and liquidity transfer.

But I believe that as more people enter Web3, this situation will change. The recent actions of Ton and Telegram, along with developments in gaming, lead us to believe that more people will enter Web3, which will drive the development of NFT utility, purchases, trading, secondary market volumes, and more. So, I believe the future of NFTs is bright, but they will look slightly different and will gradually evolve with market development.

Foresight News: Speaking of adoption, what role do you think gaming plays in helping the adoption of NFTs?

Yat Siu: I think the role of gaming is huge. So, we have made over 150 investments in different Web3 gaming companies and will continue to do so.

The reason we believe it will grow is that we think gamers are very natural Web3 users, especially in Asia. Because gaming has elements of virtual currency, for example, gamers have ownership of skins, so they have a more instinctive understanding of it. Some traditional games in Asia—like Square Enix—are also trying to build with NFTs.

Moreover, gaming tends to appeal to younger people, which aligns well with the growth narrative of Web3. In South Korea, 60% of people under 30 own cryptocurrency, indicating a stronger correlation between the younger demographic and cryptocurrency. Gaming may currently dominate digital youth culture, so this will drive adoption. Gaming has always been a reason for many trends to grow. Without gaming, we wouldn't have GPUs that help with Bitcoin mining, nor the AI machines we have today. Without gaming, we wouldn't have companies like Razer. We wouldn't have fun glowing keyboards or curved screens. Things like Angry Birds actually created one of the biggest use cases for smartphones. So, gaming has always been a key driver of adoption in the digital world, and we believe it will be the same in Web3.

Foresight News: Browsing recent news, you have made some quite "bold" statements, such as, Bitcoin price will reach a million dollars, and that the entire crypto market will reach $200 trillion in 10 years** by 2030. Briefly explain the reasons behind these predictions. Do you have similar bold predictions for NFTs?**

Yat Siu: I said "it's possible," it's "maybe."

First, regarding the price of Bitcoin, it's due to its scarcity, with only 21 million coins. So, if we believe that billions of people will enter Web3 and own cryptocurrencies, then owning a whole Bitcoin is like having a certain social status. It's like owning property in Beverly Hills or Mayfield, Atherton—some wealthy people don't actually live in those places, but (owning property in those wealthy areas) represents a social status, and I believe Bitcoin will play a similar role in the virtual realm. So, this attribute of social status leads me to believe that the value of Bitcoin will increase.

As for the industry scale, in fact, I was just giving an example to illustrate that this field will grow in some way and prove it can grow 100 times. I was surprised when I saw this news headline, thinking, did I say that? But anyway, whether it's 20 times, 30 times, 50 times, or 100 times, those numbers are not the most important part; what's more important is that it will grow at an extremely fast pace.

Because when you come from an era and environment without property rights and capital appreciation potential to an environment with potential capital appreciation, you will see the acceleration of (related assets) value significantly increase as network effects begin to compound.

If you can never own a house, you can only rent it. (Real estate) will never have capital appreciation, and wealth formation will be impossible. For example, a thousand years ago, only kings, lords, and dukes could own land; most ordinary people could only farm the land but not own it, so they couldn't accumulate wealth. And when we start giving ordinary people property rights, the development of the economy and capitalism causes the GDP of these markets to rise rapidly. Today, the world's GDP is about $100 trillion and continues to grow, with the expanding market size stemming from our ability to own physical property.

However, many people around the world still do not have property ownership in a meaningful sense. Imagine what would happen if most people around the world had the ability to own equity and assets. I believe we will see an explosive growth in value, possibly growing 100 times.

My point is that we can now create an ecosystem where everyone owns property. So, there is potential for people around the world to actually own an asset that may have value. Imagine what would happen if 100 million people owned Ethereum. What would happen to the value of the tokens? What would happen to the value of the ecosystem? I mean, we are still far from the potential it could actually have. When you have 100 million or a billion people using these tokens, the value of these network effects will rise rapidly. That's what I mean.

So, the network effects under today's total crypto market cap of $2.6 to $2.7 trillion are still very small. I mean, in DeFi, there are at most a few tens of millions of users. When you consider cryptocurrency broadly, its adoption rate is still very low.

U.S. Election Year—The Crypto Industry Has Already Won

Foresight News: I just participated in a media Q&A session with (U.S. presidential candidate) Kennedy. He said he bought three Bitcoins for each of his children. Do you think this year's Consensus has a bit too much political element like this?

Yat Siu: But that's not surprising, right? I think people are celebrating politics.

Because in contrast, last year (the attendees) were very frustrated, feeling defeated, but this year, I feel people are happier and have a bit of a victorious energy. We now have the capability to do shocking things like FIT21 (the bill passing), which means the grassroots in the U.S. may be more supportive of crypto than we think. Why has this become such a bipartisan issue? Politicians realize that if they vote against it, they will lose their jobs. This means that voters in those areas are not as opposed to cryptocurrency as traditional media suggests; the community support for Web3 in the U.S. is greater than we imagine.

It's like the (2016) U.S. election, where everyone thought (Hillary) Clinton would win, but it turned out that those who voted for Trump didn't tell others they would vote for him. Because, you know, it's a bit awkward. Or some people say that those against Trump were too loud, like, I don't want to argue with you. Maybe, maybe crypto is similar. Perhaps more people in the U.S. like cryptocurrency; they just don't talk about it.

So, I believe the U.S. has the potential to regain its leading position in the blockchain space, which I think is beneficial for the world because it will accelerate industry development. So, I am very optimistic about this.

Foresight News: My understanding is that you believe the so-called "election effect" will actually have a positive impact on the crypto space, right?

Yat Siu: Yes. Because it is becoming a narrative, which means people are now talking about cryptocurrency in a positive way in politics, which wasn't the case before. I personally believe this means that regardless of who wins, the crypto community has already achieved a preliminary victory.

The Democratic side has also indicated that we need to take a more positive attitude toward the industry. So, in my view, regarding the significance for the crypto industry, who wins is almost irrelevant. Because the latest legislation and the reactions to it have already changed the situation to some extent.

I am not an expert in this area; this is just an observation.

Hong Kong Government's Friendly Policies Enhance the Dignity of Crypto Practitioners

Foresight News: So, what about Hong Kong? Hong Kong has recently had many very friendly policies, such as ETFs.

Yat Siu: (I heard) they are even discussing possibly allowing staking, where ETF holders can receive staking rewards. Wow. This is not confirmed; it's a discussion. But the key is that this discussion itself is very interesting.

Foresight News: As an investor and entrepreneur in Hong Kong, how do you personally view this trend of policy friendliness?

Yat Siu: I think it's very good. I believe the government has been very supportive, and you know, when there is a government that supports you, even if they don't do much—though Hong Kong has done a lot, they have a Web3 fund, they are investing in this field, and doing various promotions—but when you have a supportive government, the respect level of the entire society goes up. For example, in Hong Kong, if you work in Web3, that's cool, and you will gain respect. If you hire people, they will want to work for a Web3 company.

Whereas in the U.S. last year, if you worked for a Web3 company, you had to pretend you weren't in Web3; you needed to hide it. They wouldn't speak up, wouldn't accept media interviews, and sometimes they wouldn't even tell friends they were working for a blockchain company because it seemed awkward. (Companies would also) find it hard to recruit talent.

When you have to operate your business in secret, it becomes very difficult. You might even feel a bit ashamed about it, right? So, a supportive government is not just about giving you money or having a legal framework—though those are certainly important—but it also provides a sense of self-esteem and value, giving people a feeling that they are working in an important industry.

I know the crypto industry is very anti-establishment and can sometimes go to extremes. But ultimately, the voice of the government is very powerful. I believe Hong Kong's positive stance in this regard helps the development of this field.

Foresight News: Animoca is a company heavily invested in NFTs. During times of poor market performance, have you faced pressure from investors or other sources? Because there may inevitably be some paper losses.

Yat Siu: I understand what you mean, but we have not faced any pressure in this regard because our performance has been very good so far. We have over $2 billion or $2.5 billion in token assets, excluding equity. Additionally, we have nearly $300 million in cash. So, the business is progressing well. Moreover, our investors understand that this is a volatile industry with market cycles. In fact, I think most of it is positive.

We believe Web3 will create a world where we can have more financial inclusivity, creating a way for us to have more ownership. Web3 is a way for us to redraw and reshape capitalism. This is a very important point.