Big risks for investors in digital assets

More than 20 discussion sessions at Vietnam Tech Impact Summit 2024 focus on technology and finance topics

Having been operating in Vietnam for decades, Don Lam, founder partner and CEO of VinaCapital is interested in technology. He has been investing in emerging areas like AI, of which Vietnam ranks fifth in ASEAN, and 39^th globally, for some time.

"The blockchain platform is a huge market that Vietnam should not ignore. In the past five years, the cryptocurrency market capitalisation has reached a 66 per cent compound annual growth rate (CAGR), from $191 billion in 2019 to $2.4 trillion in 2024. And Vietnam is leading Southeast Asia in cryptocurrency adoption," Don Lam said.

VinaCapital is also interested in the data centre, whose capacity has increased by 22 per cent and is expected to soar fourfold between 2024 and 2030. Next is the semiconductor chip segment, which the government is promoting and Vietnam has an advantage through incentive policies, and renewable energy.

"To build a national strategy for blockchain application and development, Vietnam needs to build a legal framework for blockchain application and development. In addition, establishing infrastructure and ecosystem for this industry, training and fostering skilled workers in the field, promoting the application of blockchain in numerous fields, encouraging research, innovation and international cooperation are also essential," he said.

Gracy Chen, CEO of Bitget and BitEXC (left)

In the same view, Gracy Chen, CEO of the crypto exchange Bitget and BitEXC discussed the blockchain's vision in Vietnam, which ranked fifth globally in Chainalysis' 2024 Crypto Adoption Index.

The market’s projected growth is a compound annual growth rate of 10 per cent (2024-2032), with expected revenue of $1 billion in 2024 and $64.4 revenue per user. Vietnam’s blockchain market is poised for rapid expansion, with a compound annual growth rate of 17.4 per cent from 2023 to 2029.

For Bitget, Southeast Asia is a growth hub, accounting for over 10 per cent of global crypto transactions annually, making it pivotal for Bitget’s global growth strategy. Platforms like BitEXC exemplify the commitment to tailoring products for individual markets while adhering to global security and innovation standards.

"With over 21 per cent of the population owning digital assets, Vietnam ranks among the global leaders in crypto adoption," Chen said. "This presents a unique opportunity to introduce a localised platform designed to meet the country’s specific needs."

Bitget plans to demystify crypto for new users in Southeast Asia through outreach programmes and partnerships, ensuring accessibility and inclusivity.

"We are building a sustainable ecosystem in Vietnam by integrating local payment gateways to support local blockchain projects, Bitget’s vision aligns with Vietnam’s rapid crypto evolution and evolves to serve the broader Southeast Asian market, leveraging Vietnam as a foundational base," Chen said.

Although digital assets are attractive, protecting users' assets is also necessary. Chen raised several risks that investors in digital assets need to pay attention to, like strong price fluctuations of digital assets.

"Investors should be careful not to be scammed. There are many different types of digital assets on the market today, some of them are not legal or even forms of trickery," Chen said.

The risk of asset storage also needs to be considered. "Digital assets are often in wallets or exchange platforms. Recently, an exchange took users' capital to invest but lost all capital and did not have enough assets to maintain and pay to users," she said.

In addition, there are always some on the internet, who can attack and steal users' assets.

"Some exchanges have been hacked, but that exchange does not have a user protection fund. Therefore, users choose the exchange that has a user protection fund for their investment decisions," Chen added.

Cryptocurrency is not banned in Vietnam: Ministry Cryptocurrency is not banned in Vietnam but it is necessary to develop a legal framework to ensure its on-track development and prevent risks, a representative from the Ministry of Justice has said.

The path to managing cryptoasset landscape The crypto market has become a significant income source, but the landscape still needs some clearing up in Vietnam. Dr. Nguyen Nhat Minh and Dr. Thai Trung Hieu, lecturers of Blockchain Enabled Business at RMIT University, look at regulations that are required and how they can be achieved.

Surge in cryptocurrency investment indicates multi-billion-dollar opportunity Hundreds of billions of dollars in cryptocurrencies are estimated to have flowed into Vietnam over the past year; however, the lack of a legal framework monitoring this capital flow might lead to tax losses and risks such as money laundering.