Over the years, the expansion of the cryptocurrency market has also brought about an increase in crypto investment products. The Malaysian crypto market has seen tremendous growth recently, and 2022 was no exception. Thanks to the country's growing middle class, high mobile adoption rate, and rising awareness in fintech and blockchain.
This article aims to answer the following:
1. What happened in Malaysia's crypto market in 2019?
2. Should I buy Bitcoin this year?
3. Is it a good time for crypto investment?
Like other global markets, Malaysia looks to its central bank Bank Negara Malaysia (BNM), and the Securities Commission Malaysia (SC) to develop the necessary frameworks and regulations to allow and enable new technologies such as cryptocurrency to flourish.
It is, therefore, fortunate that BNM governor Nor Shamsiah Yunus has touted the need to build a financial system that is "relevant, safe, and socially responsible". Nor Shamsiah has also spoken of the many possible uses of distributed ledger technology in Malaysia. He said that such technologies could simplify complex Shariah contractual processes. In addition, it helps automate the execution of contracts, among many other use cases.
2019 started with a bang when the then Malaysian finance minister Lim Guan Eng announced the enforcement of the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order effective January 15, 2019.
Under the new law,
Lim said such regulatory procedures were important. The government believes digital assets could serve as "an alternative fundraising avenue for entrepreneurs and new businesses, and an alternate asset class for investors." This implies that entrepreneurs can structure crypto investment packages to raise revenue.
Within two weeks of the finance ministry's announcement, the SC announced a new regulatory framework for cryptocurrency exchanges, which included requirements such as:
Five local cryptocurrency exchanges have since received conditional approval to operate in the country. Meanwhile, 19 others were told to cease operations.
It is worth noting, however, that these local exchanges are only permitted to trade four types of cryptocurrencies. Meanwhile, platforms such as Remitano support a wider arsenal comprising Bitcoin (BTC), ETH, Tether (USDT), BCH, LTC, and XRP.
In a world rife with uncertainty caused by constant shifts in politics and policy, what could be better than investing in a decentralized, technology-driven currency that does not rely on a sole entity or authority? Such was the vision of the elusive Satoshi Nakamoto. The legions of bitcoin evangelists who invested before the 2017 bull run.
Another bull run could happen in 2020 following the halving of bitcoin in May, according to experts. Halving is a procedure that happens approximately once every four years whenever another 210,000 blocks of Bitcoin are created. Under the procedure, the volume of new Bitcoins entering circulation daily is reduced by half, and the mining cost increases. This phenomenon is often seen as a catalyst for Bitcoin bull runs, and the same is expected this year.
This is because, like real gold and silver, Bitcoin is a scarce digital commodity that needs to be mined. This scarcity gives it value --- more so when the global supply of this commodity is reduced by half.
Unlike fiat money such as the Ringgit Malaysia produced by local governments, the supply of Bitcoin cannot be pushed up or manipulated by entities who wish to increase its stockpile, thereby allowing Bitcoin to avoid the pains of monetary inflation and currency dilution. This has made bitcoin one of the significant default choices for people that are thinking of long-term crypto investment products.
Also, unlike fiat money and conventional commodities like gold and silver, there is a known supply limit for Bitcoin: only 21 million Bitcoins will ever be created. This limit is governed by the Bitcoin protocol, which also ensures that new bitcoins are produced at a fixed, predictable, and decreasing rate.
According to US-based bitcoin and cryptocurrency asset manager Grayscale, the company saw inflows worth US$600 million from institutional investors in 2019 alone --- more than they received from 2013 to 2018 combined. This means that institutional and retail investors now view bitcoin and other digital currencies as viable and valuable investments and that they were also anticipating another bull run in 2020.
In the words of Winston Churchill, we should "never let a good crisis go to waste". The current instability brought about by the novel coronavirus pandemic has again proved the benefits of having a decentralized, global market that never closes. As an investor, you can take comfort in knowing that your crypto investments will never be affected by the economy of any one country or the decisions of any one government. It is a truly free market.
Ultimately, the actual value of cryptocurrencies lies in their utility, i.e. their use as a form of money. For instance, here at Remitano, we transact with our employees, contractors, and partners using the cryptocurrency USDT. It is a token tied to the US dollar and known for its stability.
This is merely one of many examples of cryptocurrency adoption in business. We invite you to join us on a journey to discover more.
Check out our helpful guides to learn more about Bitcoin and Ethereum, and how you can buy them in Malaysia.
Then, visit us at Remitano.com to get started for free.
