Bitget Research: Middle East Traders Take Over Crypto Market

In 2024, the Middle East has become a significant player in the global cryptocurrency market. According to Bitget Research, the region has seen a remarkable 166% increase in daily crypto traders, bringing the total to an average of 500,000 active traders. This number is expected to rise to 700,000 by the end of the year, highlighting the Middle East’s burgeoning role in the crypto landscape.

Key Drivers of Growth

Several factors contribute to this rapid growth. The primary driver is the region’s increasingly favorable regulatory environment. Countries like the United Arab Emirates (UAE) have implemented crypto-friendly policies, attracting a significant influx of traders and investors. The UAE, in particular, has emerged as a hub for cryptocurrency activities, with 72% of its crypto users investing in Bitcoin, which is often referred to as “digital gold” by local users. The country’s progressive stance on digital assets is exemplified by its plans to become a center for blockchain and cryptocurrency innovation.

Investment Behavior and Preferences

The Bitget report highlights distinct investment behaviors among Middle Eastern traders. In the UAE, a substantial portion of users (29%) view cryptocurrencies as a more convenient way to hold assets, while 34% are active traders, and 22% use crypto for daily payments. This diverse usage reflects a deepening integration of cryptocurrencies into daily financial activities.

The preference for Bitcoin and Ethereum is strong in the region, driven by their perceived stability and growth potential. This investment behavior is facilitated by the reliance on global centralized exchanges (CEXs), which offer a broader variety and higher liquidity of tradable assets compared to local exchanges. Despite the lower traffic on local platforms, the convenience of local currency deposit and withdrawal channels on global exchanges remains a significant advantage.

Impact of Geopolitical and Economic Factors

Geopolitical stability and economic policies also play crucial roles in the region’s crypto adoption. For instance, the approval of Bitcoin ETFs and a market upturn have further stimulated interest in digital assets. Moreover, the devaluation of local currencies and low banking penetration rates in several Middle Eastern countries have made cryptocurrencies an attractive alternative for asset storage and transfer.

The Middle East’s proactive approach towards modern financial technologies and innovation is gradually transforming its economic landscape. This shift is evident in the increasing acceptance and support for cryptocurrencies in countries traditionally governed by Islamic financial principles, which typically discourage high volatility investments.

Challenges and Opportunities

While the growth in the Middle East’s crypto market is impressive, it also faces challenges. The primary concerns include regulatory uncertainties in some countries and the need for more robust local trading platforms. However, these challenges present opportunities for further development. Enhancing local exchange infrastructure and regulatory frameworks can bolster market stability and attract more institutional investors.

The involvement of global entities like Binance, which secured a fully operational virtual-asset service provider license from Dubai’s Virtual Assets Regulatory Authority, signifies growing international confidence in the region’s regulatory environment. This development is expected to encourage more global crypto firms to establish a presence in the Middle East, further driving market growth.

Future Outlook

The future of cryptocurrency adoption in the Middle East looks promising. Bitget Research anticipates continued growth in both user numbers and market size. The region’s strategic location, coupled with its forward-thinking regulatory policies, positions it well to become a major global hub for digital assets.

Gracy Chen, Managing Director of Bitget, expressed optimism about the region’s potential, noting its significant influence in the global crypto space. The UAE’s ambition to become a center for crypto innovation is particularly noteworthy, as it attracts talents, funds, and enterprises from around the world.

Conclusion: A Promising Horizon for Crypto in the Middle East

The Middle East’s dramatic rise in crypto trading activity underscores its growing importance in the global digital asset market. With a supportive regulatory environment, increasing user adoption, and strategic international partnerships, the region is set to play a pivotal role in the future of cryptocurrencies. As the market continues to evolve, the Middle East’s commitment to innovation and modernization will likely drive further growth and solidify its position as a leading crypto hub.