The UAE experienced 400 per cent growth in the number of registered crypto businesses between 2020 and 2022, leading to a surge in global digital asset trading, accounting for 10 per cent of global volume, research shows.

Recent statistical data on Mena region crypto adoption indicates that it is home to the fastest-growing cryptocurrency industry, taking up a 9.2 per cent share of global transactions in the period from 2021 to 2022. In addition, the region saw a 300 per cent increase in blockchain-related educational programs and accounts for as much as 8 per cent of all mining hash rates.

Based on these trends, Bitget, a leading crypto exchange plans to scale its Middle East team rapidly to support business growth, with 60 new hires over the next 2 years or more across the Middle East region. New team members will include various mid-office and back-office functions. “As of now, Dubai is an operational hub for the Middle East market. This move is not just about business, it is about our core values, which rest on advancing blockchain and crypto adoption worldwide,” Gracy Chen, managing director of Bitget, told Khaleej Times in an interview.

Bitget set up an office in Turkey earlier this year and presently provides fully-localised services through its online trading platform. On November 23, last year, Bitget introduced Arabic support for crypto trading in middle-east And north african countries “Additionally, in response to the increasing demand for online trading platforms in the targeted Middle East markets, the company has already begun the process of applying for licenses. Obtaining the necessary regulatory approvals and licenses is a priority for establishing regional offices in these markets,” Chen said.

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With Bitcoin trading at records, what is the outlook for cryptos this year?

The BTC halving significantly affects the supply and demand dynamics of BTC. With the US Securities and Exchange Commission’s approval of the BTC Spot ETF, demand for BTC is set to increase substantially. It is anticipated that the April 2024 BTC halving market might support a price rally earlier than previous halving cycles, potentially playing a greater role in supporting upward price movements for BTC.

Throughout 2024, it is essential to monitor any potential shifts in U.S. policy and the timing of such shifts. With worsening expectations for the U.S. economy, there is market analysis suggesting a high likelihood of the Federal Reserve beginning a rate cut, alongside a decline in the 10-year Treasury yield, which bodes well for overall risk assets. Stablecoin market capitalization has witnessed consistent growth for over a month. It is important to note that changes in stablecoin market capitalization usually lag behind market trends. If this trend of stablecoin market capitalization growth continues, it indicates a temporary absence of a market shift.

How has Web3 trading developed in the past year and how do you see it building this year?

The concentrated application for a Bitcoin ETF led by BlackRock is the most significant narrative of 2023.

Spot Bitcoin ETFs can reduce investment costs, increase liquidity, improve price tracking efficiency, and meet stricter regulatory requirements, expanding the accessibility and acceptance of Bitcoin. Especially for retail and institutional investors, spot Bitcoin ETFs provide a more convenient and direct investment channel.

The influx of substantial new funds into the cryptocurrency market is bound to boost the total market value of the crypto world. With such expectations, the confidence of both institutions and retail investors has been greatly strengthened.

In 2024, there will be six market catalysts for positive developments:

The SEC’s approval of Bitcoin spot ETF is expected to be followed by Ethereum Cancun upgrade which is scheduled for the first quarter, during which Ethereum and L2 ecosystems will further unleash their potential. ZK L2 projects are expected to experience a token issuance boom.

The issuer of the stablecoin USDC, Circle, is preparing for its initial public offering (IPO), potentially in the first half of 2024. This move is expected to support the adoption of cryptographic stablecoins.

Bitcoin will undergo a halving in 155 days, increasing the scarcity of Bitcoin.

The FTX case is gradually entering its later stages, facing restructuring. As regulatory clarity emerges, it is expected to attract new retail funds.

The US interest rate hiking cycle is reaching its end, and the market anticipates the first rate cut as early as May 2024. Under this impetus, positive sentiments in cryptocurrency markets are expected to strengthen, enhancing the appeal of Bitcoin.

What is likely to be the impact of Bitcoin’s ETF approval on the Middle East market?

Looking back at the impact of gold ETFs on the market, the first gold-backed ETF to launch in the United States was the SPDR Gold Trust, which debuted on the NYSE on November 18, 2004, with the closing price of gold at $444.3 per ounce on that day. As other institutions gained access to gold exposure through ETF purchases, the influx of funds led to a steady increase in the spot price of gold, reaching $1,666 per ounce in 2012. As Bitcoin ETF has been approved, if these financial giants want to invest in BTC with a risk exposure similar to gold, they would need to invest approximately $30-40 billion.

It is expected that financial institutions in other regions will apply for similar businesses in the United States. To prevent large and medium-sized financial institutions from transferring their funds out of the region, other financial centres such as London, Hong Kong, Singapore, and Tokyo are also expected to introduce policies related to BTC spot ETFs. This will ultimately lead to the widespread globalization and adoption of cryptocurrency. For Middle East, as a region where crypto regulations and licensing procedures are streamlined, this can significantly impact and accelerate crypto adoption’s growth. The Middle East has already seen rapid crypto adoption, with countries like the UAE and Dubai becoming major crypto hubs. This existing interest could fuel further growth with an ETF available. The increased interest in crypto could result in development of new financial technologies and services in the region, further enhancing financial inclusion and access.