Cryptocurrencies on the march again, but beware the pitfalls

A key driver is growing interest among institutional and super-rich investors

- Angela Tan

There has been a surge of interest in cryptocurrency trading. Many retail investors in Singapore, including teenagers, have ploughed into the asset class, which has been touted for possible returns rarely seen in traditional financial assets—the kind that minted Bitcoin millionaires in a matter of months.

Coinbase, an onshore crypto exchange that is licensed by the Monetary Authority of Singapore (MAS), said it has seen steady growth in interest in and trading of digital assets, especially in the last two quarters.

Mr Hassan Ahmed, Coinbase's country director for Singapore and chief executive of Coinbase Singapore, tells The Sunday Times that growth here has been rapid, with one in two finance-savvy Singaporeans holding crypto in their portfolios.

Mr David Hui, chief commercial officer of DBS Digital Exchange (DDEx), has seen trading volumes on the DBS-operated digital exchange grow four times in 2024 from 2023.

A key driver is the growing interest by institutional investors and super-rich investors, who increasingly view digital assets as a viable alternative asset class.

Investor focus has been on blue-chip crypto tokens, with Bitcoin and Ethereum accounting for over 90 per cent of trading volume on DDEx in 2024.

BUST AND BOOM
Bitcoin, the flagship cryptocurrency, and the rest of the crypto sector have seen multiple boom and bust cycles, old sages in personal finance have repeatedly warned.

For instance, Bitcoin's price fell from US$65,000 (S$87,000) to US$16,000 within months in 2022 as high-profile blow-ups such as FTX, one of the premier US-based cryptocurrency exchanges, hurt confidence.

Cryptocurrency prices have rallied hard since President Donald Trump's election in November, after he promised to make the United States "the Bitcoin superpower of the world".