How is the Stock Market of Malaysia Affected by Bitcoin?
As Malaysia strives for a more resilient economy, the country seems to welcome bitcoin and cryptocurrencies with open arms. A recent survey by Luno (an exchange) suggests that Malaysians are increasingly interested in cryptocurrency investments.
Malaysia has been experiencing some financial stability issues lately. As a result, the Ringgit has been performing poorly and has lost quite a bit of value. You can check this on the official website. This is reflected in the recent movements of the stock market as well.
7 Positives of Bitcoin that Benefits the Stock Market of Malaysia
1. Emerging technologies give rise to new ‘economic’ opportunities
Technology has always played a pivotal role in the economy. Think about how the Industrial Revolution gave way to mass production, leading to greater productivity and significant economic growth. The same is happening again today with the emergence of blockchain technology.
As it continues to gain traction, bitcoin may become a new way to conduct transactions. Malaysia has been showing interest in bitcoin and blockchain technology in recent years. While the government hasn’t fully embraced it yet, many local companies have started exploring this new technology.
It’s still too early to say that blockchain will replace fiat currencies, but what you do know is that for now, cryptocurrencies are here to stay. You’re likely to see a lot more blockchain-based technology in the years to come, which means there will be an ever-increasing number of opportunities.
2. Thailand is now looking into cryptocurrencies as a way out of a currency crisis
In recent weeks, the Thai Baht has been performing poorly against major currencies such as the USD and EUR.
As a result, the Thai government has been looking into cryptocurrencies as a potential investment destination for its citizens. However, if the government of Thailand was to reject bitcoin and other digital currencies, it might put their country’s financial stability at risk.
3. Malaysian companies embrace blockchain technology
Recently, you’ve seen several Malaysian companies exploring implementing blockchain technology.
Even the country’s central bank has announced that it will be testing a ‘private blockchain.’ In other words, it would only use the blockchain as a ledger system. This is positive news, showing Malaysia’s seriousness about embracing emerging technologies and adapting to new economic opportunities.
4. Cryptos attract big businesses
Many people fail to realize that bitcoin and cryptocurrencies are still in their infant stages. Some examples include Microsoft, Dell, PayPal, and Expedia, which started accepting payments via bitcoin.
However, that’s not all either, as some merchants, including TigerDirect, Namecheap, and Overstock.com, now buy bitcoin too.
5. Cryptos can help reduce a country’s dependency on other countries
As you’ve seen, the Malaysian Ringgit has been performing poorly against major currencies such as the USD and EUR of late. It’s still unclear how this will affect Malaysia in the years to come, but one thing is sure – it’s time the country looked for alternative investment destinations.
With that in mind, bitcoin makes a lot of sense as it has proven to be a valuable source of portfolio diversification. It’s also worth mentioning that contrary to fiat currencies such as the RM, cryptocurrencies are not controlled by central authorities, which means they’re subject to inflation and political manipulation.
3 Negatives of Bitcoin that Affects the Stock Market of Malaysia
1. Security and Protection of Cryptocurrency is a Major concern
You cannot deny that digital currencies such as bitcoin are still new to most people, and there’s still a lot of uncertainty about their security and protection.
Perhaps the only positive side of this situation is that many countries invest in researching how to best protect their consumers and businesses from cybercrime.
2. Volatility and fluctuation
Bitcoin and other cryptocurrencies are famous for their volatility, meaning that their value tends to change a lot in a concise space of time.
This can be both positive and negative depending on your point of view. While some people may see it as an opportunity to make money, others may see it as a significant drawback.
3. The cryptocurrency system is still not regulated
Some people believe that bitcoin and other cryptocurrencies will replace fiat currencies in the years to come. However, they’re still new to most countries which means they’re not properly regulated.
The stock market of Malaysia can be affected by cryptocurrencies. So with that, they’ve to know more about the crypto environment to keep up with this new innovative technology development.