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Bitcoin, virtual assets adoption to increase in UAE

Dubai - Bitcoin fell back sharply last week after hitting a record high of $61,781.83 as US President Joe Biden signed off on his $1.9 trillion fiscal stimulus and ordered an acceleration in vaccinations

Adoption of Bitcoin and other virtual assets is set to increase among the significant tech-friendly population amidst the burgeoning startup environment in the UAE, said Arshad Khan, chief executive at the Arabian Bourse.

Bitcoin fell back sharply last week after hitting a record high of $61,781.83 as US President Joe Biden signed off on his $1.9 trillion fiscal stimulus and ordered an acceleration in vaccinations. Bitcoin’s new high also came as 10-year US Treasury yields hit a 13-month high of 1.64 per cent on previous Friday.

“The 60,000 level represents another milestone for Bitcoin, which presents another reason for increasing interest from retail and institutional investors in the UAE. The UAE has been gradually getting more involved in the virtual asset space, as shown by the recent initiatives,” Khan said

Additionally, he said the proliferation of DeFi technologies and more recently NFTs is likely to have a further impact on businesses and retailers in the region.

“The release of comprehensive guidelines and framework by ADGM has also made it easy for investors to trust regulated bodies, which in turn gives individuals and institutions great confidence in the market,” he said.

Moreover, with an increase in online trading activities over the course of the past pandemic-ridden year, UAE-based investors are likely to diversify their investments by including bitcoin and other virtual assets in their portfolios.”

Bitcoin has over the years rebalanced itself multiple times and has driven investors’ interest in the cryptocurrency as an alternate mode of investment.

“Many jurisdictions like the UAE have issued legislation to recognise blockchain-based digital assets, boosting investor confidence even more. Lastly, the announcement of USA’s stimulus package and shift of focus of institutional investors to alternative modes of investments has also boosted the price of Bitcoin,” Kokila Alagh, founder of Karm Legal Consultants, said.

Marwan Al Zarouni, CEO of Dubai Blockchain Centre and member of the Dubai Future Council for Blockchain Technology, said the Dubai Silicon Oasis Centre will drive digital economy development and talent generation as well.

“It currently houses BitOasis, one of the leading exchanges in the region. The DIFC and DMCC — fintech hubs — are the home of a number of digital assets businesses as well and they will play a pivotal role in positioning Dubai as a worldwide leader in technology adoption and regulatory foresight,” he said.

“There are many more people aware of this emerging digital economy revolving around cryptocurrencies, decentralised finance (DeFi), and non-fungible tokens (NFTs). Moreover, cryptocurrency investment is becoming a part of everyday conversations in the UAE,” he said.

— sandhya@khaleejtimes.com