Crypto's Dramatic Growth Masks Its Investment Reality

Its exceptional price volatility means that drawdown risks are amplified, says the writer

- Tan Min Lan

Few industries have reinvented their reputation as swiftly as crypto. At the start of US President Donald Trump's first term in 2017, the entire market was worth less than US$20 billion. Today, it has swelled beyond US$3 trillion (S$3.85 trillion). Over the past year alone, Bitcoin has surged more than 80 per cent—it now commands a market capitalization of close to 4 per cent of the S&P 500, nearly half the size of the largest constituent. New exchange-traded fund vehicles have also improved access, and institutional adoption is rising.

This dramatic growth coincides with a shift in Washington's regulatory climate, reigniting debates on whether digital assets are finally becoming a legitimate, investable asset class. In July, President Trump signed the Genius Act, laying the foundation for stablecoins pegged to the US dollar. The headway made by the Clarity Act, a US framework to define digital assets, and the US Treasury's new Digital Assets Report, have added to the sense of momentum.

And in Asia, the race has already begun. Singapore was a front runner in finalising its requirements for stablecoin issuers back in 2023, while recent developments—like the passage of a stablecoin Bill in Hong Kong and mainland China's exploration of a renminbi-backed version—mean that this growing legislative trend could spur increased digital asset adoption.

Meanwhile, Big Finance has joined in. BlackRock and Franklin Templeton are issuing tokenized money market funds. Mastercard and Stripe are enabling stablecoin payments. What once looked like fringe is edging into the financial mainstream.