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Is Asia driving the Bitcoin craze?

Added on 25 December 2017 - 1:40 'Viewed 46 views times.
SG Mining Image caption Firms like SG mining have never been busier.

Tucked away in a quiet corner of Singapore, the industrial complex looks like an underground ghetto.

But this, says Dexter Ng, is the workshop of the future.

A self-professed cryptocurrency entrepreneur, he’s the chief technology officer of SG Mining – a business making and selling rigs. These are the powerful computers that solve complex mathematical problems in a process that earns their owners digital currencies such as Bitcoin.

“Previously we could only sell two or three of these rigs a week,” he tells me as we walk around the cemented warehouse. “Now we can sell hundreds.”

Image caption When it comes to the Bitcoin industry, Dexter Ng has been there and got the t-shirt.

Piling in

Some of these machines go abroad, including Japan.

Image copyright Getty Images Image caption Bitcoin ATMS – like this one in Hong Kong – are increasingly common.

But that hasn’t stopped investors here from trying their luck.

At a Bitcoin exchange in Singapore, I meet a group of enthusiasts who each put in about $100 (£75) a week to buy the digital currency.

“It is the currency of the future,” one man tells me, refusing to divulge his name because he didn’t want his employer to know he was buying Bitcoin.

“If you say this is a scam, then didn’t the financial crisis teach us that all financial institutions are scams anyway?”

‘Quick money’

Bitcoin emerged in the aftermath of the global financial crisis. It’s often seen as the currency of choice for institution-weary millennials, but has also been used by money launderers, criminals, and drug buyers and dealers.

Increasingly though, more Asians are starting to see it as a way to make some quick cash, but also as a way to safeguard their savings against political crises and low interest rates.

“Many of our customers see it as a form of digital gold,” Zann Kwan, founder of the Bitcoin Exchange tells me.

“It sort of dovetails into the saving mode or the saving mindset of Asians.”

Analysts also point to the low or zero interest rate environment in Japan, the strict regulations on getting money out of China, and concerns about the North Korean crisis impacting the economy in South Korea as reasons why so many in Asia are trying to cash in on the Bitcoin craze.

Bitcoin booze-up

But they may already be too late.

“The quick money has clearly been made,” says Dheeraj Bharwani, an independent wealth strategist who has recently started advising his clients on acquiring cryptocurrencies.

“I tell my clients, be prepared for a 50% to 60% downside. You have to have a time horizon of years, not months.”

But that hasn’t stopped some businesses from cashing in on the crypto craze in Asia.

Image caption Accepting cryptocurrency has become a selling point for some businesses.

On the top of the Singapore Landmark Tower is the Skyline Crypto Club. Customers can pay for their drinks using Ethereum, another popular and increasingly valuable digital currency.

For now, it makes up only a small percentage of transactions, but club owners expect that to grow.

“We are even offering a New Year’s Eve Bitcoin package, where you pay for your night using a Bitcoin,” the club’s manager Subhaish Rajamanickam tells me.

At today’s price, that’s around $17,000 (£12,700) worth of alcohol.

But Bitcoin is so volatile, there’s no telling whether it will be enough to get you a cocktail or two in the future.

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