The cryptocurrency market in Vietnam remains bleak in 2023. - Illustrative image (Photo:AFP) Among them, a significant 43.6% of investors experienced losses, according tothe Vietnam Crypto Market Report 2023 by Coin98 Insights.
The report was based on a survey conducted in December 2023,involving 1,200 participants.
The report revealed that the majority of crypto investors in Vietnamare men, accounting for 85.3% of the market. The investors were predominantlyyoung, with ages ranging from 18 to 36 years old.
Specifically, 47.1% ofinvestors fell within the 26-36 age bracket, while 37.9% were aged 18-25. Datafrom OKX and BingX indicated that most individual investors were concentratedin major cities, primarily Ho Chi Minh City (50-54%), Hanoi (25-30%) and DaNang (3-5%).
In terms of income levels, a significant portion of cryptoinvestors in Vietnam earned between 10 million VND and 25 million VND per month(45.82%), while 26.22% earn less than 10 million VND per month. The report alsohighlighted that the majority of investors entered the market during theuptrend period of 2020-2022, accounting for 48.7% of participants.
When it comes to investment strategies, centralised exchanges (CEXs) remainedthe most trusted platforms for storing crypto assets among investors. Thesecond choice was hot wallets or cold wallets. Hot wallets, which wereconnected to the internet for easier access, were favoured, while cold wallets,which kept crypto keys offline for enhanced security, are also utilised.
Vietnam was recognised as one of the fastest-growing markets, according to OKXGlobal's assessment. BingX exchange experienced a substantial increase of138.41% in the number of Vietnamese users, reaching 143,025 users in 2023.
The report emphasised that the market remained gloomy for most of 2023, withnearly 65% of investors failing to generate profits. However, the percentage ofinvestors experiencing losses has decreased compared to 2022 (57.5%).
The challenging market conditions have led investors to adjust their riskappetite, with only 25% regularly utilising leverage. OKX trading floor datareveals that Vietnamese investors generally opt for leverage of 2.5x or higher.
The reasons behind investor losses in 2023 in Vietnam were quite diverse, withtwo prominent factors accounting for over 66% of the cases: FOMO (Fear ofMissing Out) and a lack of careful transaction planning.
Vietnamese investors typically considered multiple aspects beforemaking investment decisions. Instead of relying on a single factor orinvestment style, they often combined various options to arrive at their finalchoices.
Most investors in Vietnam preferred to store their assets on centralisedexchanges (CEXs) and utilise these exchanges as their primary method forinvesting, buying/selling, and holding crypto assets. In 2023, new investmenttrends gaining popularity included Airdrop and Retroactive strategies.Interestingly, Bitcoin (BTC) was not the most invested asset. Instead, tokensfrom layer 1 and layer 2 Blockchains receive more attention.
Regarding investment strategies in 2024, the report suggests that,in line with the overall market trend, the majority of Vietnamese investors arefocusing on AI projects, Blockchain layer 1 and layer 2, NFT and SocialFiprojects, rather than DeFi and RWA. Investors hold positive expectations forthe market in 2024, with projections of BTC prices surpassing previous peaks.As a result, many plan to increase their allocation to the crypto market inhopes of achieving high profits.
The success or failure of investors was influenced by variousfactors, as highlighted by a report from Coin98 Insights. Investors whojudiciously use leverage at appropriate times tend to have higher profit rates.Conversely, those who regularly employ leverage often experience losses.
The number of years of investor experience was also a significantfactor related to investment outcomes in the crypto market. Veteran investors,who participated before 2017 or during the 2017-2020 period, exhibit lower lossrates compared to new investors (from 2022 onwards).
Interestingly, profitable investors often relied on macroeconomicconditions, news and on-chain data for decision-making, whereas unsuccessfulinvestors tended to follow the advice of friends or Key Opinion Leaders (KOLs).
The ratio of crypto asset allocation to the total portfolio alsoimpacts investment results. Data indicated that investors who allocate smalleramounts of capital (less than 10% and 10-30%) tend to have higher loss ratesand lower profit rates compared to other groups. This may be attributed to thefact that investors with smaller allocations often do not closely follow themarket as compared to those with larger allocations.
Notably, investors who experienced losses in 2023 were moreinclined to invest in Memecoins and NFTs, while holding less Bitcoin. Thisserves as a valuable lesson for investors to exercise caution when dealing withMemecoins and NFTs.
Trends in 2024
Predictions for 2024 varied among three different groups ofinvestors. Investors who broke even or made profits in 2023 displayed higherconfidence in Blockchain layer 2, DeFi and RWA (Real World Assets). On theother hand, investors who incurred losses in 2023 showed more faith inMemecoins and AI projects.
Profitable investors are expected to continue focusing onBlockchain layer 1, layer 2, DeFi, RWA and AI projects in 2024.
The Coin98 Insights report acknowledged the challenging year of2022 and the first half of 2023, which created an overall subdued sentiment inthe market. However, by the end of 2023, with the anticipation surrounding theBitcoin ETF and other factors, the market regained its vibrancy. Many investorsbelieve that a new growth cycle is on the horizon.
Therefore, 2024 is expected to carry forward the momentum from theend of 2023, marked by significant news and events that will impact the entiremarket, such as the outcomes of the Bitcoin ETF, the Bitcoin Halving and theDenCun upgrade of Ethereum.
However, the report also emphasises the need for investors toremain attentive to macroeconomic factors that can influence the overalleconomy and the crypto market specifically. Factors such as the US FederalReserve maintaining high-interest rates, geopolitical tensions, food securityand environmental issues should be taken into consideration./.
VNA
