The country is poised to be a global cryptocurrency hub as the market capitalization hits $ 1.4 trillion, up 86% year-to-date.
Digital currency has disrupted the way money is viewed by the masses, and the future of money is a click away on your mobile, giving you the ability to make payments to buy or sell goods digitally and in several currencies. Countries around the world are currently grappling with their national currency, the central bank’s digital currency proposal, and cryptocurrency. Are you ready for the future? otherwise, it’s time to get to the point.
What is cryptocurrency?
A cryptocurrency, or crypto, is a digital currency that can be used to purchase goods and services, but which uses an online ledger. The world’s largest cryptocurrency is Bitcoin (BTC) which has a market capitalization of over $ 821 billion; Ethereum (ETH) at $ 353 billion and Tether (USDT) at $ 68 billion.
Bitcoin hit $ 61,795.40 for the first time in six months on Friday, as hopes grew that U.S. regulators would clear a futures exchange-traded fund (ETF), a move that could pave the way for a broader investment in digital assets.
Cryptocurrency investors were awaiting the approval of the first US ETF for bitcoin, with bets on such a move fueling its recent rally. The world’s largest cryptocurrency rose 4.5% to its highest level since April 17 and last stood at $ 59,290. It has increased by more than half since September 20 and is approaching its all-time high of $ 64,895 reached in April 2021.
The U.S. Securities and Exchange Commission (SEC) is expected to authorize the first U.S. bitcoin futures ETF to start trading next week, Bloomberg News reported on Thursday.
The government of the United Arab Emirates supports
The popularity of cryptocurrency has also affected the Mena region, as digital assets have gained momentum in Dubai as the government allows free zones to conduct crypto-related business activities in the UAE. The country is poised to be a global cryptocurrency hub as the market capitalization hits $ 1.4 trillion, up 86% year-to-date.
Recently, MidChains, the Abu Dhabi-based virtual asset trading platform and part of the Hub71 cohort, also completed its first trades on all of its listed assets as a fully regulated and supervised trading platform. acting under the regulatory framework of the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM).
MidChains has confirmed transactions on Bitcoin, Ethereum, Litecoin, and Bitcoin Cash and is the first regulated platform in the UAE to complete transactions on all of these virtual assets on September 1. MidChains’ currently listed crypto assets for trading account for over 65%. of the global market capitalization of the cryptocurrency market. MidChains is backed by notable regional and international investors including Mubadala Investment Company (Mubadala), Miami International Holdings and DisruptAD, ADQ’s venture capital platform. MidChains is the first and only fully regulated virtual asset trading platform to receive support from sovereign wealth funds in the region.
“The year 2021 has brought great news for crypto start-ups looking to locate in the United Arab Emirates. The Securities and Commodities Authority (SCA) has signed agreements with some of the country’s flagship free zones – DMCC, DAFZA and DWTCA – making it easier for crypto-related companies to license, set up and operate in the United Arab Emirates. This is clearly a vote of confidence in the growing crypto ecosystem in the country and the region. In addition to enabling more effective oversight of the crypto market, this decision by SCA will help strengthen Dubai’s reputation as a future-ready center, well positioned to benefit from the growing adoption of crypto in the world. years to come, ”said Srinu Chowhan, vice president of marketing and growth, BitOasis, which sees regional transaction volumes on its platform exceed $ 3 billion in the first half of 2021.
“With a favorable regulatory framework in the works, the emergence of cryptocurrencies as a new asset class recording extraordinary returns and a high concentration of wealthy individuals (HNWI) in the United Arab Emirates in particular, there is a Growing acceptance of crypto assets as a way to diversify and grow portfolios. We see a lot of potential for crypto adoption in the Mena region. The right regulation coupled with investor awareness initiatives will lead to the massive adoption of crypto assets in the region. “
The UAE is fast becoming a global hub for this unique and emerging asset class. Regional pioneers Coinbase, BitOasis and Matrix have seen the industry grow rapidly.
“This emerging sector is growing in breadth and depth during a period of pandemic turmoil and unprecedented economic policy interventions. Prices fell nearly 50% between April and July, yet more than $ 2 billion in investment was allocated to the sector in August. Underneath all of this, technical and financial innovation is flourishing. The world is realizing what many of us have known for some time: Virtual assets are here to stay, ”said Terry Culver, CEO of Matrix.
The 11th edition of the AIM Summit which recently concluded at the Dubai International Financial Center (DIFC) included representatives from Tezos, Invictus Capital, RChain, Hut 8 and CasperLabs.
Talal Tabbaa, co-founder and CEO of Jibrel Network said, “It is inevitable that crypto goes mainstream, as the global adoption rate is around 2% and it makes sense that we see this increase in the years to come. to come. Bahrain and the United Arab Emirates have already taken strong steps to accelerate crypto growth in the region. It’s great to see a surge in SCA and certainly a step in the right direction, but I think comprehensive crypto regulation that covers the banking industry is essential. The entry and exit of crypto is still up to the banks, so tackling the elephant in the room is important.
Crypto has gained popularity in the Middle East in a very short time. New crypto technologies such as Defi and NFT are starting to provide positive real world utility to their users. With greater regulatory clarity in this space and the United Arab Emirates and Bahrain establishing the regulatory framework for cryptocurrency-related activities, the adoption of digital assets will continue to increase.
“The UAE has become a popular destination for crypto and blockchain investors and entrepreneurs and the recent SCA decision to allow crypto asset trading within the Dubai World Trade Center (DWTC) is another positive step by the authorities in promoting and supporting the growth of the crypto space within the UAE, ”said Arshad Khan, Managing Director of Arabian Bourse.
“Dubai and Abu Dhabi have gained a global reputation as innovative cities, this move will allow an explosion of growth and new ideas in the crypto space. This move will accelerate the synergies and innovations that are already happening in the UAE crypto space and indeed attract new and very talented people to the city. This will also translate into job creation and additional investment.
Meanwhile, CED2021, one of the leading cryptocurrency exhibitions and conferences, wrapped up on Friday, with more than 8,000 people attending the hybrid event. The event saw the participation of over 80 speakers from the crypto industry and 64 crypto companies. Top crypto companies like Currency.com, Zebpay, B2broker, Regal RA, Smartkey, Koda Finance, Bybit, Localtrade, CoinSwap joined the event and showcased their offering to traders and investors.
Bitcoin mining explores sustainable energy
The most powerful feature of bitcoin is that it allows individuals to transfer value to each other securely without a centralized intermediary verifying the transaction, such as a bank.
Rather, the transaction is verified by a process called mining. Bitcoin mining ensures the security of the bitcoin network and allows transfers to take place Peer-to-Peer (P2P) – a decentralized platform through which two individuals interact directly with each other – over the internet in around 10 minutes, a said Zachary Cefaratti, Chief Executive Officer, Dalma Capital Management.
Miners are paid for verifying transactions with a transaction fee and receive an additional reward for securing the network with newly created bitcoin. All new bitcoins coming into circulation are created by mining, and there will never be more than 21 million bitcoins of which almost 90% are already mined. Every four years the number of new bitcoins entering the market halves and the last bitcoin will be mined around 2140.
Cefaratti said: “Bitcoin mining is an extremely profitable industry right now, with the most efficient mining operations achieving 90% short-term EBITDA margins. “
The extraordinary profits of the bitcoin mining industry are due to the combination of the high price of bitcoin, the global shortage of chips, the recent ban on Chinese mining, and the long delays in developing an infrastructure. appropriate electrification in this energy intensive sector.
The high profitability of bitcoin mining has led to an increase in capital market activity, but has also attracted close scrutiny with a push for the industry to shift to more sustainable sources of energy. Bitcoin mining is already a leading industry in terms of sustainability, with around 70% of bitcoin mining using sustainable energy compared to around 16% in the wider economy.