MENA Crypto Market to attract Investors

The UAE’s crypto trading market is likely to see an influx of institutional investors in 2020 once draft regulations become effective, according to a recently released report.

The study, produced by Invao Group, states that there is also likely to be a further increase in the price of bitcoin, with the May 2020 bitcoin halving, whereby the rate at which bitcoins are produced is halved every four years, likely to push the price up further. But the Invao report does call for caution in terms of how much further bitcoin value can increase given that the effect of the halving may already be priced in to the current value.

Perhaps more significant will be the introduction of the regulations from the UAE’s Securities and Commodities Authority which were issued in draft form earlier this year and put to the market for feedback. According to Invao managing partner Ahmed Jacob, crypto-friendly regulations that can create legal certainty will be key to the industry’s future development and encouraging businesses and investors to come to the region.

“UAE-based institutional investors, in particular family offices, are becoming increasingly interested in crypto-markets,” said Jacob.

“The key argument for institutions to get involved is that digital currencies are uncorrelated to other asset classes, making them a perfect tool for portfolio diversification”.