Bitcoin ETFs: A Game Changer for Singaporean Crypto Investors, 48% Set to Add More Bitcoin This Year – 2024 Independent Reserve Cryptocurrency Index Shows

The 4th edition of the annual cryptocurrency study1 by Independent Reserve, Singapore's first regulated cryptocurrency exchange for all investors, shows that Bitcoin is top of the nation’s mind.

Fueled by recent industry developments such as the approval of spot Bitcoin exchange-traded funds (ETFs) in the US, 39% of Singaporeans now view Bitcoin more favourably. 51% are aware of the US SEC’s approval of spot Bitcoin ETFs, and 33% are open to investing through an overseas offering given that the product is not available to retail investors in Singapore.

With the upcoming Bitcoin halving event in April, 48% of crypto investors will continue to double down on Bitcoin in the next 12 months. Particularly, those who hold more than 50% of their portfolio in crypto are the most likely to increase their Bitcoin holdings (68%).

Given a choice, however, 75% of Singaporeans prefer investing directly in Bitcoin through a cryptocurrency exchange rather than through a Bitcoin ETF offering, because of lower fees and a wider range of trading options.

Mr Lasanka Perera, CEO, of Independent Reserve Singapore, said, “The long-awaited arrival of the spot Bitcoin ETFs has supercharged the demand side for Bitcoin as billions of dollars from institutions has poured in. The trust and understanding of Bitcoin have grown significantly over the past few years, and more Singaporeans are increasing their allocations.

“This year’s IRCI findings also mirror the longer-term optimism towards cryptocurrency investing in Singapore - the industry is now filled with positive energy leading up to the Bitcoin halving event and what lies beyond. Seasoned Singaporean crypto investors are showing more sophistication as they diversify their portfolios, dollar-cost average, and tactically take profit. This is fantastic to see as it highlights a growing understanding of this asset class.”

Singapore scored 56 on the IRCI this year, up 1 point from 2023. Singapore's 2024 IRCI score reflects a positive shift in public perception towards cryptocurrency. While overall awareness and ownership might have dipped slightly, other key metrics indicate a growing sense of confidence and optimism in the market.

This year’s IRCI also found that Singaporean investors are more sophisticated on various fronts. The majority (52%) have been in the market for more than 3 years and hold increasingly diverse portfolios: more are holding 6 or more different cryptocurrencies (16%, up from 5% in 2023). In addition:

• 52% of Singapore’s crypto owners primarily invest in crypto to diversify their investment portfolio, signifying the growing confidence in crypto as an alternative asset class.
• Despite the ups and downs in market cycles, Singapore crypto investors are more certain about their plans for the next 12 months. 53% are going to invest more into their existing portfolio, and 45% indicated a desire to diversify into new projects.
• 61% who are experienced investors i.e. have been in the market for more than 5 years, cited frequent trading - at least once a week, compared to those who are newer to the market.
• 64% of crypto owners have reported making money (up 9pp) - surpassing profit levels of the last 2 years and inching closer to the 74% who reported profits at the 2021 bull market peak. Only 10% lost money this year compared to 26% in 2023.
• More than half of the respondents - 55%, believe crypto will be widely accepted by businesses and everyday people (up 5pp). Particularly, the number of non-crypto owners who believe that crypto will be accepted by the mainstream also rose 8pp to 35%.

A higher proportion of Singaporeans turned a profit on their crypto investments this year. Additionally, there’s a decline in negative sentiment, with fewer people viewing crypto with dislike and suspicion.

More Singaporeans believe in the long-term viability of the industry, signalling increasing mainstream trust and acceptance. Furthermore, more individuals are likely to invest in crypto within the next year, strongly indicating a resurgence in adoption.

Rising interest rates and cost-of-living have not dampened Singaporeans’ bullishness towards crypto

To date, Singaporeans have displayed a healthy appetite for crypto investments. For their very first crypto purchase, 65% invested more than $500, and some 41% of current crypto investors still invest about $500+ a month towards their portfolio.

Despite being impacted by the rising interest rates and cost-of-living, almost a third or 29% of Singaporeans would opt to hold and/or increase their crypto allocation. Another 37% who are not impacted by rising costs also plan to hold or add their crypto.

Particularly, Boomers (above 55 y/o) are very bullish - 25% will hold or increase their crypto allocations despite cost-of-living pressures. Boomers' financial stability and reduced financial obligations may be possible causes for their ability and confidence to hold crypto and leverage its potential growth.

Meanwhile, 16% plan to sell a portion of their assets to help with such pressures and only 6% plan to liquidate their entire crypto portfolio to cope with the financial climate.

Gen Z and Gen X are worlds apart

This year’s report unravelled the polarising attitudes and behaviours of 2 interesting segments in Singapore - Gen Z (18-25 y/o) and Gen X (46-55 y/o). These are two generations that were shaped by contrasting technological, social and economic eras. Having witnessed robust growth, Gen X prioritises job security and traditional career paths. In contrast, Gen Z, facing a competitive market, might be more receptive to entrepreneurial ventures.

Gen Z are headlong on crypto:

• Gen Z were more likely to invest in crypto, apart from in 2023, where more Gen X were still invested during the bear market. In the last 12 months, 47% of Gen Z were in crypto (up 8pp), while Gen X participation dropped to 30% (down 15pp).
• 42% of Gen Z are likely to invest in crypto in the next 12 months, compared to 31% of Gen X.

Gen X is cashed up and diversified:

• 56% of Gen X’s first crypto investment was over $1000, compared to 24% of Gen Z. Moreover, 42% of Gen X invest $500 or more per month compared to 21% of Gen Z.
• Gen X are more diversely invested across traditional investment products such as stocks, bonds, ETFs, high-yield savings accounts and Real Estate Investment Trusts (REITs).
• Likewise, Gen X are more likely to have exposure to a wider range of crypto assets. 18% of Gen X hold 6 or more cryptocurrencies compared to 4% of Gen Z.

Portfolio diversification vs word-of-mouth recommendation:

• When it comes to drivers influencing investment in crypto, 55% of Gen X were driven to diversify their existing investment portfolio compared to 35% of Gen Z.
• Gen Z were most influenced by family and friends (47%) to invest in crypto, compared to 37% of Gen X.

Fear, a lack of money and education keep non-investors away:

• When it comes to reasons for not investing in crypto, 45% of Gen X cited not enough consumer protection vs 22% for Gen Z, and 47% stated price volatility vs 39% for Gen Z.
• Conversely, 43% of Gen Z say their main reasons for not investing in crypto is not having the financial means vs 15% for Gen X, and 44% do not know where to start vs 16% for Gen X.

Gen Z is bullish, Gen X blows hot and cold

• 61% of Gen Z believe crypto will be widely accepted by people and businesses in the future, while just 44% of Gen X agree. However, only 18% of Gen Z and 17% of Gen X don’t believe crypto will be widely accepted by people and businesses in the future.
• 51% of Gen Z would recommend crypto to family and friends, compared to 35% of the conservative Gen X.
• However, Gen X is more bullish on Bitcoin’s future price, with 26% believing it will reach over $100,000 by 2030, compared to 19% of Gen Z.

All eyes are on the Bitcoin halving event

Occurring approximately every four years, the “halving” is an event where Bitcoin miner rewards are halved. It has historically acted as a catalyst for a crypto bull market. Following the 2016 halving event, Bitcoin saw a staggering 10-fold increase in value, and an exponential 7.5x price jump in 2020 from US$9,100 to US$68,500, despite the volatile economic climate then. These past events prompt the question of whether Bitcoin will climb toward even greater highs in 2024.

As Bitcoin price optimism returns, Singaporeans’ outlook for Bitcoin’s price is positive. Almost half (48%) believe a Bitcoin will be worth between S$50,000 and S$100,000 by 2030 (up 16pp from 2023). 31% of those already invested in crypto are confident that Bitcoin will hit more than $100,000 (up 13pp from 2023).

“All eyes will be on Bitcoin in the coming few weeks. With the halving on the horizon, the supply of newly mined Bitcoin will reach an all-time low. This sharp decline in the supply will most likely see Bitcoin’s price break all-time highs, many times throughout the year.

“Ultimately, this year’s IRCI reveals that Singaporeans are just as excited about Bitcoin as I am. Bitcoin is seen as a digital gold, but superior to gold in many ways – it is portable, divisible, scarce, verifiable and can move over the internet 24-7,” Mr Perera concluded.

The full 2024 IRCI report can be viewed here.