Cryptocurrency Investment Increases: Opportunities from a Hundred Billion Dollar Market
It is estimated that hundreds of billions of dollars in cryptocurrency have been transferred to Vietnam over the past year. However, the lack of a legal framework has made this capital poorly controlled, causing tax losses and potential money laundering risks...
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Vietnamese people make billions of dollars from investing in virtual currency?
Ms. Lina Nguyen, Business Development Director, Exness Investment Bank, commented that the hibernation period of cryptocurrencies is over, positive signs are continuously appearing and more and more institutional investors are participating in this market.
“Capital flows into digital assets will continue to increase. Financial institutions will also participate in this investment segment. Retail investors have similar interests, but they are hesitant and cautious,” said Ms. Lina Nguyen.
It is known that in just the first few months of this year, more than 1,200 billion USD has been poured into digital asset ETFs.
According to Chainalysis, the positive trend in the cryptocurrency market in 2023 will continue into 2024, especially after the boost from the US granting permission to trade Bitcoin spot ETFs and stronger participation from institutional investors.
Vietnam ranks third globally in the number of cryptocurrency owners. According to Crypto Crunch App, Vietnam has 26 million cryptocurrency owners (5 times the number of securities accounts in Vietnam).
Research by Dr. Nguyen Nhat Minh and Dr. Thai Trung Hieu, lecturers in blockchain business (RMIT University), shows that cryptocurrency owners in Vietnam have diverse demographic characteristics, including young, highly skilled workers, technology enthusiasts and small business owners looking for alternative investments.
Data from Chainalysis shows that up to 120 billion USD in cryptocurrency was transferred into Vietnam within a year, up to June 2023. According to this organization, virtual currency investors in Vietnam "pocketed" 1.18 billion USD in profits in 2023. Vietnam is one of 5 Asian markets in the Top 10 markets with the largest profits from virtual currency investments in the world last year, along with China, Indonesia, India and South Korea.
Dr. Pham Anh Khoi, Deputy Head of the Fintech Committee (Vietnam Blockchain Association) said that according to a report by the Boston Consulting Group, the size of the tokenized real assets (Real World Asset - RWA) market in the world is expected to reach 16,000 billion USD, equivalent to 10% of global GDP by 2030. According to Standard Chartered, this market could even double to 30,000 billion USD in the next 4 years.
Digital assets in general and RWA in particular are considered a valuable opportunity, helping developing countries like Vietnam to participate in the global capital market with the advantage of being an effective, low-cost capital channel for projects with real assets in Vietnam. The amount of cryptocurrency flowing into Vietnam in the past year is nearly 5 times higher than attracting foreign direct investment (FDI).
Need to have legal corridor soon
Although digital assets are an attractive investment channel and capital raising channel, helping investors and funds diversify their portfolios, this is also a high-risk market with large fluctuations. Not to mention, this is also the market with the largest number of fraudulent projects compared to other investment channels. Ignorance investors are very susceptible to being scammed or losing money when participating in this market. Therefore, this is not an investment channel for the majority.
Investors participating in the digital asset sector in general and RWA in particular need to prepare knowledge and understanding of the financial, technological and legal markets; consult experts and leading organizations; continuously assess and update volatility and legal risks; choose a reputable trading platform; especially need to have a clear investment strategy and diversify the portfolio to minimize risks and maximize benefits. 
- Dr. Pham Anh Khoi, Deputy Head of Fintech Committee (Vietnam Blockchain Association)
To take advantage of opportunities from the digital asset market, experts say that a legal corridor is needed soon.
“If there is a management policy soon, instead of flowing into the underground economy, this cash flow can become a good driving force to help boost the economy. In particular, the first sector that can receive this capital flow is RWA, due to the outstanding advantages of this type of asset such as being guaranteed by real assets, quick liquidity and diversifying the investment portfolio,” Mr. Khoi commented.
Dr. Nguyen Nhat Minh and Dr. Thai Trung Hieu also said that the legal gap in cryptocurrencies exposes investors to significant risks, including fraud, market manipulation and security breaches.
As more people become interested in owning and investing in cryptoassets, there is a pressing need for regulations that protect consumers and ensure market transparency, experts say. This includes measures to prevent fraud and combat cyber threats. Implementing strong consumer protection regulations can help build investor confidence and encourage broader participation in the cryptoasset market.
In addition, the unregulated crypto-asset market could also threaten overall financial stability in Vietnam. Without proper supervision, financial crimes such as money laundering and terrorist financing are at risk.
“The digital asset and cryptocurrency market is still being viewed with a very cautious eye by the regulatory agency. I think that in the event of major fluctuations in global politics and economics, cryptocurrencies will take the lead, which will put great pressure on the State Bank. The State Bank cannot stand idly by when cryptocurrencies play an increasingly important role in the global financial market. Perhaps, the regulatory agency needs to soon implement a controlled pilot program with cryptocurrencies to test their operations, thereby drawing experience and lessons when officially operating in the economy,” Dr. Nguyen Tri Hieu, an economic expert, recommended.
Source: https://baodautu.vn/dau-tu-tien-ao-tang-manh-co-hoi-tu-thi-truong-tram-ty-usd-d221181.html
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