High inflation rate to give rise to digital assets as new investment alternatives in 2022

PETALING JAYA: With rising prices and inflation trends, as well as thinning options in the investment basket, investors can look into a different set of investment options that sees growth in the era of digital finance and assets.

MX Global Sdn Bhd CEO Datuk Fadzli Shah (pix) said despite the slight downturn at the end of last year, people will begin to reinvest in the first quarter of 2022, a trend that is not historically uncommon. As fiat currency demonstrates weaker power in the past two years, cryptocurrency sees a huge increase in acceptance in many countries. Malaysia is observing its active cryptocurrency traders reaching almost the million range.

As one of the four recognised market operator – digital asset exchange (RMO-DAX) with approval from Securities Commission Malaysia, MX Global sees more licences being rolled out and an increase in local regulated exchanges in the future. This shows that crypto trading is already being accepted, and as it becomes more real, there is a need for it to be regulated for its continued expansion. Albeit cryptocurrency’s high investment potential and obvious future growth, there are still uncertainties surrounding its existence among investors.

“We have a financial system that has been here for years, so it is understandable that there are investors who are still sceptical over the concept of cryptocurrency, and that is why it is important for us regulated exchanges to keep investors informed on what it is, the benefits, and the safe and danger zones of this relatively new digital asset,” said Fadzli in a statement today.

Similar to the equity and the forex markets, cryptocurrency is also a digital asset class that is speculative, thus investors should differentiate between questionable coins and legit coins that have strong and serious underlying fundamentals. Citing the infamous Squid Game Token and its rug pull ending, it is important that interested crypto investors be vigilant in choosing the right coins to invest in order to fully reap the benefits of crypto trading.

“This is one of the reasons why MX Global’s exchange platform currently only has two coins available for trade, which is bitcoin and ethereum. These coins are considered as blue chip assets and are legitimate, that have withstood the test of time with clear indications that is it here to stay and grow,” added Fadzli.

MX Global plans to introduce more coins in the future following internal research and reviewing of potential coins. RMO-DAXs such as MX Global are regulated exchanges that are compliant and provide a secured platform as opposed to unregulated exchanges. The company focuses on the underlying fundamental technology behind the potential coins such as the existence of credible business and developer guidelines, as well as the technological promises that the coins intend to deliver. Hence, a regulated exchange provides a much safer environment for investors’ peace of mind as compared to unregulated exchanges albeit the numerous coin options on unregulated platforms.

Moreover, the concept of smart contracts is also climbing the ranks in terms of safety and efficiency in usage. Smart contracts are digital, self-executing contracts written into codes on a blockchain that automatically runs when the conditions are met. It may be used in situations such as funds transfer, account registration or issuing a document.

“I think what’s going to be in store in 2022 will be the utilisation of smart contracts and leveraging on smart contracts. Blockchain technology will fundamentally change how we live and work in the future, with big players such as China which is already adopting blockchain into their economy. Blockchain-based smart contracts will be imminent in the future of supply chain and eventually the global economy,” commented Fadzli.