Competition between shares, real estate and gold… Where will Asian investments go after the bankruptcy of FTX?

The bankruptcy of cryptocurrency exchange FTX has sent anxiety and panic into the cryptocurrency investment markets.
And investment institutions around the world are asking questions about the future directions of capital, especially those who have been accustomed to investing in cryptocurrencies in recent years, and how they can reposition themselves in the markets in the next phase, especially with the growing state of economic uncertainty in international markets and high inflation rates and shock which hit the markets after the FTX bankruptcy.
However, the most pressing issue at the international level was related to Asian capitals and the direction of investment they will embark on in the coming period.
The interest in Asian capital and its investment trends stems from the fact that, unlike other world markets that are feeling severe pressure as a result of high interest rates and inflation, the Asia-Pacific region is one of the few regions whose economies are growing, and this has created a strong positive position of Asian capital and violent vibrations in currency markets. There is speculation that they will return to investing heavily in traditional assets, be it stocks, bonds, real estate or other traditional forms of investment.
But what is the weight of Asian investors in the world of cryptocurrencies, specifically in the bankrupt exchange FTX?
Explaining to “Economic”, L. Scotty, a financial analyst in the field of cryptocurrencies, commented on this situation, saying: “Investors in Asia are currently relatively underweight in cryptocurrencies, and according to available data for the past year, only 19 percent of household wealth in Asia invests in cryptocurrencies compared to 31 percent in North America and 28 percent in Europe. However, more than half of those responsible for managing family wealth in Asia – 53 percent to be exact – praised cryptocurrencies as a promising investment, despite the recent earthquake markets, compared to 43 percent in North America and 33 percent in Europe.”
Chinese investors are the strike force of the investment forces in the Asian continent in general, and in its eastern part in particular, and this is what makes them recover their financial losses from unprotected investments the most on the FTX exchange, as approx. 8 percent of traders on the FTX platform are from China, even though local laws prohibit cryptocurrency trading.
For her part, Janet Lyon, a banking expert at Nate West Banking Group, told The Economist that China was the third largest market for FTX in terms of user base after the United Kingdom, the Cayman Islands and the Virgin Islands, all of which are safe harbors. The first lesson learned by Asian investment fund chairmen and large investors as a result of the platform bankruptcy is the importance of trading digital assets on regulated exchanges or investing in portfolios that trade on regulated exchanges.”
And he adds: “In the next phase, Asian investors will be more inclined to invest in stocks in countries such as Vietnam, Taiwan, India, Indonesia, Thailand and Malaysia, especially in technology and software companies, as well as consumer products companies that have profit growth, and achieve an average growth of 10 percent for five consecutive years.” At the very least, while its debt is low or non-existent, and there must be a return on capital, on assets and on invested capital of at least 20 percent.”
As a result, many experts believe Asian capital will target assets that outperform when economic growth slows, but could also do well if markets pick up.
That’s why Janet Lyon believes that China’s convertible bond funds, which earn fixed yields of between 4 and 5 percent and are currently trading at historically low levels and have a unique ability to protect investors’ money when markets fall, are particularly attractive to Asian capitals.
Another area that Asian capitals are expected to focus on in the next phase relates to sectors that fall under the category of telecommunications and energy companies (oil, coal and natural gas), as these sectors are associated with high current and future demand.
This, believes investment expert Anand Chris, will see the UK gain a large share of Asian investment, as a result of the pound sterling falling to its lowest level in decades.
And he assures Al-Eqtisadiah that investing in property, watches and classic cars in the UK has become better due to the fall in the value of sterling, and when Asian buyers think of the UK, most of them think of real estate, but lately also with rising mortgage rates and economic uncertainty, making returns from a return and capital gains perspective has become difficult. However, UK property investment has not lost its appeal to Asian capital, which may focus more on investing in shops and offices than investing in homes.
He says: “Also, the jewelery sector – especially after diamonds, emeralds and sapphires have achieved impressive results in the last few years – is an attraction for Asian investors, and this is of course linked to the possibility of increased Asian demand for gold. The FTX bankruptcy caused is a reaction among investors moving away from high-risk investments and hedging.” At the same time, inflation is present, which is why gold will be a popular choice in the coming period because it maintains its value, and is often seen as a safe investment haven, and expensive art, especially undervalued ones, will be attractive for investment.
But does this mean that Asian investors will leave the world of cryptocurrencies forever? Most experts are unlikely, as their appetite for unregulated and volatile digital assets may be limited, but investment in security tokens is gaining momentum in the Asia-Pacific region.
Experts define security tokens as a digital investment asset that represents ownership and transfers value from the asset to a specific token. In other words, security tokens are a digital form of traditional investments such as stocks or bonds. A company looking to raise funds for a new project may choose to issue partial ownership of its company through a digital token instead of issuing shares. You can then offer this token to investors on an exchange that allows trading.. Digital Security Codes.
He, on the other hand, says yes to “Economic”. De Ceraz, an expert on the Asian economy, “Security tokens and cryptocurrencies are almost identical, since they are generated by the blockchain, and both are symbols, but the fundamental difference lies in the purpose, the intended use and the actual use. in the same way as stocks, bonds , certificates or other investment funds.”
He added: “Asian capital – through its accumulated experience in the cryptocurrency business – will not leave this market, but will transfer its investments to security tokens, because they are safer than cryptocurrencies, despite the fact that security tokens do not meet the criteria for consideration of securities ago.” Securities and Exchange Commission.