Cryptocurrency – a digital form of decentralized currency encrypted by a combination of security measures and algorithms to identify its uniqueness amongst other currencies. The vision behind the emergence of cryptocurrency was to enable a clear and transparent medium of exchange to be used by people around the world, but recent developments in the world of crypto and the operations of individuals and enterprises around the world have caused it to be constantly surrounded by speculation and fluctuations in value.
Currencies are subject to external market forces and risks, and cryptocurrency is no exception, with significant events in cryptocurrency history causing large fluctuations even in the value of the most popular and stable currencies such as Bitcoin and Ethereum. An example would be Bitcoin’s (BTC’s) growth in value once the whitepaper by its creator Satoshi Nakamoto was published, which led to many developers worldwide operating on Bitcoin’s blockchain, growing its popularity and stability in value as opposed to the then rising interest rates of the US dollar. In 2021, certain cryptocurrencies were enjoying meteoric rises, such as Ethereum (the 2nd most traded cryptocurrency behind Bitcoin) which had a 399.2% increase in value that year. However, in recent months, crypto has somewhat moved on from being a hot trending topic in news headlines, instead settling back into being more of a niche topic with many dedicated investors and players around the world still operating in the crypto space. With that in mind, we decided to take a deep dive into Malaysian cryptocurrency trends to see whether more Malaysians are now operating in the crypto space, and if awareness and familiarity has continued to increase.
Awareness and Familiarity Towards Cryptocurrency
Awareness and familiarity of cryptocurrencies globally are well known, 4 in 5 urban Malaysians are said to be aware of the term digital currencies. However, only 21% of Malaysians claimed they are actually familiar with what Cryptocurrency actually is.
What % Own Cryptocurrency?
Crypto ownership amongst Malaysians has fallen considerably since its all-time high of 41% in 2Q’21 when Cryptocurrency ownership was at its peak, coinciding with BTC’s all-time high as well.
Now, a year down the road with governments across the world having more scrutiny around cryptocurrency and a recession looming over everyone’s heads, crypto has seen a drop in users. The overall percentage of Malaysians that are holding cryptocurrency recovered slightly to 34% at the start of this year, but has since fallen back down to just 25% in 2Q’22, reflecting the fall of crypto’s popularity in other major markets such as the USA where, according to a Reuters survey, less than 10% of Americans own Bitcoin.
Types of Currency Owned?
Cryptocurrency has been the buzzword of the decade. During the years leading up to 2021, Crypto gained enormous popularity and a whole new industry emerged for its trading. In 2022 however, the overall numbers for Malaysian Crypto ownership are at an all-time low. As of now, the numbers are 6% for both Bitcoin and Bitcoin Cash while Litecoin has dropped to 3%.
How Do Malaysians Invest in Cryptocurrency?
With consumer behavior changing, more and more Cryptocurrency investors are being forced to be more conservative. Newer investors are known to put a lump sum, or set amount of money monthly, into Cryptocurrency, whereas the older generation, who are more seasoned in the field, opt for safer investments. This is especially true for PMEBs who tend to be more aggressive (hoping to aim for a higher return) when compared to their non-PMEB counterparts.
Cryptocurrency Monthly Trading Frequency?
As the digital currency market continues to grow, the sector of non-PMEBs is expanding its exposure and participation in Cryptocurrency. Within the first half of 2022, we see that daily trading activity spiked significantly to 42% vis-a-vis 30% in 2021. This suggests that the attitudes of crypto-holders in Malaysia are now highly speculative in nature, looking for a quick turnover and not going for a long term investment per se. Consequently, the average number of crypto-related trades in a typical month also grew to 17-to-18.
Top Platforms and Exchanges Used?
Huobi, Local Bitcoin, Bitpanda, and eToro remain the most frequently used cryptocurrency exchange markets by the people in Malaysia today. As of this year, Huobi has overtaken Local Bitcoin to be the most-used trading platform in the first half of 2022. Additionally, there is currently a higher preference towards Huobi (55%) and Luno (20%) among PMEBs whereas the Non-PMEBs have a higher preference towards Local Bitcoin (36%) and Bitpanda (22%).
Source of News For Cryptocurrency Updates
In the wake of their recent volatility, investors are looking for more frequent updates about cryptocurrency news compared to 2021, with the number of cryptocurrency users that constantly read up on the latest news doubling over the past year.
When it comes to sources of crypto news, Word-of-mouth (60%) has grown to be one of the key sources followed by Telegram (36%) and social media sites (Clubhouse & FB) (29%) which remain the prominent source among the PMEB audience.
With our latest report, we also bring you a focus on Non-Fungible Tokens, more commonly known as NFTs. An NFT is an individual digital asset with its own unique digital identifier (e.g. serial number) that can come in many forms such as artwork, videos, music and even items in video games. With the rise of cryptocurrency, came the rise of NFTs as people came to realize its potential as an application of blockchain technology for exchanging assets, digital merchandise and cryptocurrency, with some NFTs being exchanged for upwards of several million dollars.
Cryptocurrency vs NFT Ownership
Looking at a comparison between cryptocurrency and NFT ownership amongst Malaysians, 33% of Cryptocurrency owners also claim to own NFT, which is not surprising as NFT often requires cryptocurrency in order to be purchased in the first place. However, the majority of people in the study own crypto only, which can be attributed to skepticism regarding the long-term value of NFTs, especially with the value of assets from prolific NFT collections such as the Bored Ape Yacht Club dropping 78% in the span of two months.
The NFT Ownership Landscape
NFT awareness and familiarity have been increasing since 1Q’21, and overall awareness of NFTs is now hovering around 70% which is at a slightly lower level compared to Cryptocurrency. However, despite a good awareness level, only 10% of consumers claimed they are familiar with NFTs. This reflects the somewhat inaccessible nature of NFTs even within the crypto space, as well known NFT collections have prices far beyond what the average crypto user would consider purchasing, while cheaper and lesser known NFTs would be perceived as not being worth purchasing to those who would rather invest in more prominent forms of crypto such as Bitcoin.
Platforms Used To Buy NFTs
Finally, we take a look at the platforms used to buy NFTs, where Foundation is steadily becoming Malaysia’s favorite NFT trading website. Pentas.io, is a Malaysian NFT website which has dropped significantly in popularity, losing its appeal amongst NFT buyers and is now in 4th place behind Rarible and OpenSea.
Despite no longer being at the forefront of news and the media, the crypto space is still going strong and seeing significant advancements as the global community continues to progress towards Web 3.0, with many people still remaining focused and optimistic when it comes to the potential of crypto and the myriad of applications for blockchain technology. If you would like to learn more about cryptocurrencies, blockchains, and how you can venture into the crypto space, reach out to us at theteam@oppotus.com.
