Amid Global Economic Slowdown and Geopolitical Risks, Cryptocurrencies Are Making a Comeback

Among cryptocurrencies, Binance Coin (BNB), which can be used to trade and pay fees on the Binance exchange, offered the highest return for 2024 of 89.6% as of July 22

Cryptocurrencies are making a comeback amid a global economic slowdown and geopolitical risks, ranking among the world's top-performing assets in the first seven months of 2024.

Among cryptocurrencies, Binance Coin (BNB) offered the highest return for 2024 of 89.6% as of July 22, followed by Bitcoin at 51.0% and Ethereum 47.5%.

Other top performers include the Nasdaq 100 index at 19.8%, gold 16.4%, MSCI World 14%, oil 13.4%, MSCI Asia 8.21%, MSCI Emerging Markets 6.80% and coal 5.68%.

This year cryptocurrencies received regulatory support, starting with the US Securities and Exchange Commission's (SEC) endorsement of the first spot Bitcoin exchange-traded fund (ETF) in January.

On May 24, the SEC approved the establishment of a spot Ethereum ETF (ETH ETF) and registered the trading of investment units on US stock exchanges, allowing institutional investors, a group with high purchasing power, to invest in this asset.

As a result, the market capitalisation of cryptocurrencies has increased to roughly US$2.5 trillion as of July 3, from around $1 trillion in mid-October last year.

Kavita Gupta, founder and partner at Delta Blockchain Fund, said the launch of spot ETH ETF could have major implications for other altcoins.

"The launch of the ETH ETF was a major development for the space and will kick-start the next altcoin rally, despite the Bitcoin dominance we have seen thus far," she said.

Cryptocurrency enthusiasts expect four more coins have the potential to be endorsed for spot ETFs, which could attract institutional investors to invest more in the crypto market in second half of the year.

BNB'S UTILITY

BNB, issued by the Binance exchange, was created in 2017 as a utility token for discounted trading fees before it was expanded to numerous applications on a wide range of platforms. It is used to pay transaction fees on Binance.com, Binance DEX and Binance Chain.

BNB can also be used for payments on Monetha and HTC; to book accommodation at sites such as TravelbyBit, Trip.io and Travala.com; to buy music or game rewards; to pay for online services at BitTorrent, Canva and Storm; or to take out a loan at ETHLend or invest at Moeda.

Every quarter, Binance uses one-fifth of its profits to repurchase and permanently destroy or "burn" BNB held in its treasury.

At the time of writing, BNB had a market cap of more than $87 billion, ranking behind only Bitcoin, Ethereum and USD Tether.

Sanjay Popli, chief executive of Cryptomind Advisory and co-founder of Cryptomind Group Holdings, said BNB has been a popular coin for a long time. However, over the past few years, some investors were concerned about how much the Binance Exchange and BNB coin would be affected by the US SEC's investigation.

Changpeng Zhao, a former chief executive of Binance Exchange, was sentenced to four months in prison by a US court on April 30 after pleading guilty to violating US money laundering laws.

Zhao is scheduled to be released from prison this month. Though he is no longer an executive at Binance, he is an important figure behind the scenes, leading investors to speculate on the price of BNB, said Mr Popli.

BNB coin may also benefit from Binance Launchpad, the exclusive token launch platform of Binance that assists blockchain startups in raising funds for new projects.

Investors prefer holding BNB coins when the crypto market is active because many new coins are expected to list on the Binance platform, and they will receive free coins from Launchpool according to conditions, he said.

SECOND-HALF OUTLOOK

Mr Popli said interesting coins for the second half of the year include NEAR Protocol, which offers backups related to artificial intelligence (AI) technology.

He also singled out Render, a distributed graphics processing unit rendering network that operates on the Ethereum blockchain.

Mr Popli said Worldcoin is designed to become the world's largest privacy-preserving human identity and financial network, giving ownership to anyone.

Solana is a blockchain platform designed to host decentralised, scalable applications, while meme coins are another interesting development this year, he said.

SPOT ETF POTENTIAL

According to Bitkub Academy, part of Thailand's leading cryptocurrency exchange, four coins have the opportunity to be endorsed as the next spot ETFs, following Bitcoin and Ethereum.

First is Solana because it has a high market cap, ranked fourth in the crypto market with high liquidity and reliability, according to the academy.

The SEC recently decided to abandon an effort to have a court determine if 10 crypto assets, including Solana and Cardano, should be designated securities in the case

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