Singapore’s Bitcoin bet has paid off huge profits, with the country enjoying its pro-tech mindset. While most market enthusiasts had little stakes in the asset, Singapore bet it all on the leading digital asset. Over the last few years, Singapore has been betting on Bitcoin, the recent surge gave the country enough rewards with a promise for more in the future.
While most countries in Asia were dragging their feet in every aspect concerning crypto, Singapore was creating an enabling environment including regulations, infrastructures, and an enabling environment to entice crypto firms. A recent Henley and Partners report puts Singapore at the top of the global crypto adoption index. With regulations and tax breaks, the country threw everything into the crypto game to ensure the game plan worked, including a crack at an experimental digital Singaporean dollar.
Singapore’s resilience in the face of crypto winter
Singapore’s journey in the crypto industry didn’t come without its fair share of troubles. In 2022, homegrown fashion company Charles & Keith dipped their feet in Bitcoin, accepting the asset for their services. However, what they didn’t know was that the crypto winter had just begun and assets were about to see red. The crash was accelerated by Terraform Labs, a company owned by Singapore-born Do Kwon. Things went from bad to worse when FTX imploded, causing an avalanche that shook even the biggest crypto entities in the country.
While things began to crumble in the market, Singapore went about its day like nothing was happening. Even the Monetary Authority of Singapore (MAS) did not lose faith, continuing its breach into crypto from the years before. With fortunes already changed for the better, the MAS has approved over 30 firms including giants like Coinbase to offer crypto services.
Meanwhile, an earlier survey showed that about 40% of the country’s population owns crypto. The adoption is so far spread across all ages, with everybody looking to tap into the world of cryptocurrencies. However, the MAS is still cautious about getting burned a second time, banning retail investors from spot Bitcoin ETFs and suspending crypto listings. The current bull run has brought back the belief, adding Trump’s return to the White House next year as another incentive for the asset to climb higher.
Singapore’s economic growth clashes with Bitcoin’s wave
The Bitcoin rally coincides with the country’s economic growth, with inflation levels dropping. Inflation went down to 1.4% in October, dropping from September’s 2%. Core inflation, data that tracks volatile categories like transport and rent dropped to 2.1%. According to MAS, the levels dropped due to lower electricity, gas, and clothes prices. The Singaporean dollar also flexed its muscle, growing 1.34 against the United States dollar.
While inflation figures are dropping, the country’s GDP is moving up. Its year-on-year growth hit 5.4%, a higher difference from the estimated 4.1%. This is the fastest growth it has ever recorded since 2021, with officials revising growth projections from the previous 3% to about 3.5% for 2024. The MAS uses a policy band to monitor its exchange rates, instead of relying on interest rates like most countries. The adjustment ensures inflation is kept in check and economic growth increases. It is one of the reasons why the country can make calculated bets on crypto.
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