In recent months, the global financial system has seen seismic shifts that underscore the rising relevance of digital assets. US spot bitcoin ETFs, exchange-traded funds that allow people to invest indirectly in bitcoin, have seen explosive growth to more than US$120 billion in assets, reflecting a dramatic shift in investor behaviour.
Stablecoin transactions, meanwhile, surged to over US$27 trillion last year, eclipsing the total for Visa and Mastercard. In Asia, Hong Kong has emerged as a first mover – licensing exchanges, regulating stablecoin and approving cryptocurrency ETFs – positioning itself as a regional anchor in the digital asset economy.
These are not isolated events. They reflect a broader reassessment of cryptocurrency’s utility in an age of fragmentation and uncertainty. We might call it the Uncertainty Paradox – digital assets emerging from the speculative fringe to claim a surprising new role as hedging instruments against broader systemic risks.
While governments erect barriers that slow physical trade and money flow, blockchains are quietly building highways that accelerate financial flows across borders. Gold maintains its historical role as a safe-haven asset, but it cannot settle transactions across borders in minutes or bypass restrictions during crises.
Investors’ reception of spot bitcoin ETFs illustrates the appeal of the “digital gold” proposition. When US regulators approved these instruments in January last year, sceptics predicted limited interest. Yet the market has grown quickly, with BlackRock’s iShares bitcoin trust (IBIT) now managing over US$65 billion as the world’s largest spot bitcoin ETF.
Beyond the “digital gold” narrative, the true revolution lies in cryptocurrency’s capacity to build an alternative financial system that is independent of traditional gatekeepers. At its core is stablecoin: blockchain-based tokens pegged to fiat currencies like the US dollar.
