Heralding the Golden Age of Cryptocurrency

Heralding the Golden Age of Cryptocurrency

 ■ Presidentelect Donald Trump’s embrace of cryptocurrencies marks a pivotal moment

■ Analysts projecting Bitcoin to reach US$200,000 by end-2025

■ The outlook for Bitcoin and the broader crypto market is overwhelmingly positive, but risks remain

THE cryptocurrency world is buzzing with speculation that bitcoin could reach an unprecedented US$200,000 by 2025. While bitcoin has yet to stabilise around the US$100,000 mark, its meteoric rise in 2024 has emboldened investors and analysts to project a bullish future for the world’s leading digital asset.

Bitwise Asset Management, a prominent voice in the crypto sphere, has described the upcoming year as the Golden Age of Crypto.

According to the firm, the regulatory landscape in the United States has significantly improved following the 2024 US elections. President-elect Donald Trump’s embrace of cryptocurrencies marks a pivotal moment.

“We believe we are entering the Golden Age of Crypto,” Bitwise analysts, led by chief investment officer Matt Hougan and head of research Ryan Rasmussen, state in the group’s report.

Bitwise expects Crypto’s magnificent three – Bitcoin, Ethereum and Solanato – to hit new all-time highs in 2025, with bitcoin leading the rise to trade above US$200,000.

In addition to Bitwise, other analysts projecting bitcoin to reach US$200,000 include Geoff Kendrick, head of crypto research at Standard Chartered, and analysts at Bernstein, led by Gautam Chhugani.

Kendrick forecasts that bitcoin could hit this milestone by the end of 2025, driven by institutional investments in bitcoin exchange-traded funds (ETFS).

In a recent note, he stated that Standard Chartered’s target of US$200,000 by 2025 is “achievable”, adding: “We would become even more bullish if bitcoin experienced accelerated adoption by US retirement funds, global sovereign wealth funds, or the establishment of a potential US strategic reserve fund.

“We anticipate institutional flows to continue at or exceed the pace set in 2024. Microstrategy, for instance, is ahead of its Us$42bil threeyear plan, suggesting its purchases in 2025 will likely match or surpass those of 2024.”

Meanwhile, Bernstein’s analysts attribute their bitcoin price target of US$200,000 by end-2025 to unprecedented demand stemming from spot bitcoin ETFS managed by leading asset managers, according to media reports.

Trump effect

Essentially, crypto has emerged as a clear winner in the 2024 US elections, giving it a brighter regulatory outlook in the United States, Bitwise notes.

For one thing, Trump has announced plans to create a strategic bitcoin reserve and nominated Scott Bessent as Treasury Secretary. Bessent’s earlier comment that “crypto is about freedom and the crypto economy is here to stay” reflects the administration’s pro-crypto stance. The reshuffling of the Securities and Exchange Commission (SEC), which has historically taken a sceptical view of digital assets, adds another layer of optimism.

Similarly, Bernstein analysts attribute bitcoin’s rise to Trump’s support for cryptocurrencies. They point out that his plan to position the United States as a global leader in the crypto space and his choice of Paul Atkins, a known crypto advocate, to lead the SEC have bolstered market confidence.

Record highs

Bitcoin has since cooled to below US$95,000 at the time of writing, after reaching an alltime high of US$103,992 earlier this month.

This marks a 141.72% increase year-to-date as of Dec 6, 2024. According to Bitwise, the surge was largely driven by the US launch of spot bitcoin ETFS, which set records with Us$33.6bil in inflows within their first year.

Other crypto assets, including Ethereum and Solana, also posted substantial year-to-date gains of 75.77% and 127.71%, respectively. This performance highlights how cryptocurrencies, led by bitcoin, ethereum and solana, have outpaced all major asset classes in 2024.

Crypto equities mirrored this bullish trend. Companies like Microstrategy and Coinbase saw their shares skyrocket by 525.39% and 97.57%, respectively. In comparison, traditional assets such as the S&P 500 and gold returned 28.07% and 27.65% over the same period, highlighting crypto’s dominance.

Catalysts for next milestone

The factors driving bitcoin’s trajectory towards US$200,000 are multifaceted, Bitwise highlights. The launch of bitcoin

ETFS in 2024 shattered expectations, and Bitwise believes 2025 will see even greater inflows.

“When US spot bitcoin ETFS launched in January 2024, ETF experts forecast the group to see Us$5bil to Us$15bil of inflows in their first year. They passed the higher end of that range within the first six months.

“Since launching, the record-setting ETFS have gathered Us$33.6bil in inflows. We expect 2025’s inflows to top that,” Bitwise says.

Drawing a parallel with gold ETFS launched in 2004, Bitwise notes that ETF inflows typically accelerate in subsequent years.

“The best historical analogy we have for the bitcoin ETF launch is the launch of gold ETFS in 2004. Flows petering out would be unusual,” it explains.

At present, major financial institutions such as Morgan Stanley, Merrill Lynch, and Bank of America have yet to fully embrace bitcoin ETFS.

Bitwise anticipates this to change in 2025, unlocking a wave of institutional investments. “The trillions of dollars these firms manage will start flowing into bitcoin ETFS,” Bitwise predicts.

Risk tolerance

While bitcoin remains the focal point, other cryptocurrencies like Ethereum and Solana are also poised for substantial gains in 2025. Bitwise’s price targets for Ethereum and Solana are US$7,000 and US$750, respectively.

Ethereum, despite its impressive 2024 performance, has faced competition from fastergrowing programmable blockchains.

However, Bitwise anticipates a “narrative shift” as activity on

Layer 2 blockchains and spot Ethereum ETFS gain traction.

Solana’s resurgence, driven by memecoin mania in 2024, is also expected to continue as serious projects migrate to its network, it says.

Meanwhile, JP Morgan points out that the role of crypto in portfolio construction is mostly a function of risk tolerance.

“Cryptocurrencies are inherently unpredictable: there is little visibility into future price movements and blockchain technology, while exciting, also has few barriers to entry, meaning tokens can become obsolete (and therefore worthless) as new ones enter the market with improved functionality,” the US asset management company cautions.

“As a result, for most investors, any allocation to crypto in a portfolio should be kept both small enough to ensure that even in the event of a significant sell-off it does not derail overall portfolio objectives and well diversified,” it adds.

While the outlook for bitcoin and the broader crypto market is overwhelmingly positive, risks remain.

Regulatory clarity, though improving, is still a work in progress.

The global economic environment, including interest-rate policies and geopolitical tensions, could also impact investor sentiment.

However, the convergence of favourable regulatory developments, institutional adoption and technological advancements positions bitcoin as a strong contender to achieve new heights, potentially reshaping the global financial landscape.

By CECILIA kok cecilia_kok@thestar.com.my

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Equal opportunity in accounting

Rising support for gender diversity, inclusivity in profession

The importance of diversity and gender balance in professional fields, including accounting, has gained recognition in recent times.

The accounting profession, as a crucial component of the business world, said Association of Chartered Certified Accountants (ACCA) chief executive officer Helen Brand (OBE), greatly benefits from incorporating varied perspectives and experiences into its decision-making processes.

As one of the most influential voices in the profession, Brand, who was in Kuala Lumpur on Sept 6 for the 88th ACCA Anniversary Gala Dinner, sat down with StarEdu to talk about the evolving landscape of accountancy, particularly in relation to diversity, inclusion, and the future of work.

As of October 2024, women make up a substantial 62% of the accounting workforce in Malaysia, compared to 38% for men, according to ACCA’s member demographics.

“Diversity of thought and inclusive representation are not just moral imperatives – they are essential for driving better business performance and innovative solutions.

ALSO READ: Tackling inequalities

“Different perspectives can also lead to better solutions by avoiding groupthink and by ensuring a comprehensive understanding of customer needs,” Brand shared.

Brand, who is a founding member of the International Integrated Reporting Council (IIRC), is also a member of the United Kingdom government’s Professional and Business Services Council, and has participated in a number of trade advisory forums and university advisory boards.

Many businesses, she pointed out, are now committed to the United Nations Sustainable Development Goals (SDGs) due to increasing pressure from the public, governments and regulators, requiring them to demonstrate social inclusion alongside profitability.

SDG 5, she said, is one of the 17 SDGs that seeks to achieve gender equality and empower women and girls.

Brand

Gender equality is a basic human right and an essential factor for building a peaceful, prosperous and sustainable world, she added.

“It’s becoming increasingly important for businesses to show they include all parts of society in their workforce and have a positive impact.

“Inclusive slogans, however, must be backed up with tangible achievements.“Reporting on gender diversity in annual and integrated reports has become as essential as financial performance reporting,” she said, noting that companies excelling in gender diversity often see better financial results due to a broader talent pool that gives employers the biggest opportunity to recruit the best person.“Inclusion means recognising different attributes as equal, not lesser, and that’s what we can achieve by making sure that there’s equal representation with women,” she explained.

Brand emphasised that the UN SDGs play an important role, providing a clear framework to guide people’s actions and assess their progress.

The focus, she said, should not just be on financial performance.

“The ongoing discussion about sustainability, including the impact businesses have on people and the significance of human capital, is a major step forward, extending beyond the scope of the SDGs,” she said.

Gender diverse teams, said Universiti Tunku Abdul Rahman (UTAR) Faculty of Business and Finance Department of Commerce and Accountancy head Dr Sonia Johanthan, bring varied perspectives that enhance problem-solving and decision-making.

“In accounting, this means better risk assessments, financial planning, and client relations.

“Diversity also fosters creativity, which is critical for addressing complex client needs and adapting to evolving regulations in the accounting industry.

“According to a prior study, diverse board members often excel in building strong client relationships, leading to improved client satisfaction and retention, consequently increase in the firm’s value.

“The study also showed that organisations with gender diversity often outperform less diverse ones in profitability and operational efficiency,” she said.

Driving change

ACCA, said Brand, has made significant strides in promoting gender parity and broader diversity within its ranks.

“Of the 46 members on ACCA’s governing council, 26 are women, with the overall membership at 52% male and 48% female, which is nearing parity. The majority of our students are women,” she said, adding that this shift is not merely symbolic; it reflects a concerted effort to cultivate an inclusive culture and provide equal opportunities for professional advancement.

“It’s important to understand that driving diversity and inclusion is a cultural issue within an organisational business.

“Implementing systems and processes to support this culture doesn’t yield instant results; it takes time. For example, you may have a single woman on the board or at the executive level, but it does not make a difference when they’re in the minority, and their voice often isn’t heard.

“While one is better than none, achieving true diversity is a gradual process that requires continuous effort,” she said.

The real disparity, she said, is when women tend not to progress to more senior roles, despite having extensive educational and professional experience.

“In order to be a female leader, maybe about 30 years ago, you had to take on the attributes associated with men, because you had to show that you were strong, decisive, and could move things forward.

“Now, we understand that there are different styles of leadership that are equally valid, more consultative, collaborative, solutions focused, less driven by ego and more driven by outcomes, and this opens up possibilities to men and women who want to lead in a different way,” she said.

She added that it is essential for everyone to be on board and aligned to the organisation’s purpose to be a successful business, and one way to achieve this is by ensuring that every person feels supported and able to reach their full potential.

“Sometimes, interventions – whether through new laws or regulatory changes – can help drive the change that is necessary, because you need a shock to the system for it to change.

“For example, if things like board membership and leadership positions were left to develop organically, it might take many more years before we are able to reach parity,” she said.

Diversity in all aspects

Brand explained that while gender is a significant issue, particularly in some countries, there are many other important aspects of diversity that also need attention.

These include individuals from less privileged economic backgrounds, people of different ethnicities, and those with neurodiversity, as there are various ways in which certain groups have been excluded or not provided the same opportunities as others, both in society and in the workplace.

“There is a growing focus on the broader concept of diversity and inclusion, which ensures that everybody has the best possible opportunity to thrive,” she said.

She added that ACCA has implemented a range of initiatives to foster an inclusive environment and provide women with the tools and support they need to thrive, including offering specific training programmes to help women develop the confidence and skills to apply for roles they might not have considered before.

“We’ve also put in place flexible working arrangements that support both women and men in balancing their professional and personal commitments,” she said.

Alongside its diversity initiatives, she said, ACCA is also at the forefront of equipping its members with the competencies needed to navigate the profession’s evolving landscape, proving that diversity in skillsets is also valued.

“The integration of technology into the skillsets of professional accountants will become even more crucial moving forward.

“We’ve launched continuous professional development courses for members who are already qualified to make sure that they update their skills to remain relevant, and that covers top topics such as data science, data analytics, internal audit, new standards, and sustainability,” she said.

Brand believes that the profession’s ability to harness these technologies in an ethical and inclusive manner will be a defining factor in its long-term success.

“We need to ensure that the algorithms and data used are free from bias, and that the governance frameworks protect individual privacy and promote transparency.

“Accountants will play a pivotal role in navigating these complex ethical considerations,” she said.

Towards better support

“Gender bias still exists in the business world, although it has diminished over time.

The obstruction to career progression and professional growth for women is the challenge of a work-life balance, particularly for those with children. In a fast-paced and high-pressure environment of a professional accounting firm, long hours and constant change are the norm.

During my pregnancy, while working in Malaysia, I was reassigned from client work to the firm’s training centre in my third trimester, where I handled administrative tasks and facilitated in-house training.

When I returned from maternity leave, I was again given client assignments, which made me feel as though I was back on track with my career.

To empower and support women in the profession, firms need to offer greater flexibility in their work options.

This includes the possibility of working from home and flexible working hours. Additionally, firms should be transparent about career development opportunities by providing structured mentorship, professional development programmes, and clear paths to promotion.

This will help women accountants make informed decisions about their careers and achieve their ambitions.

By fostering an environment of support, firms can retain valuable talent and ensure that women can thrive in the profession.”– Sunway Business School Department of Accounting lecturer

Choo Sook Yin“The main issue lies in the persistent stereotype about women’s abilities, which limits their opportunities for growth.

In many Asian countries, where the workforce is predominantly male, the lack of female role models makes it more difficult for women to envision their own career progression.

The demanding nature of accounting roles can be especially challenging for women, particularly those juggling responsibilities in traditional households where they are expected to fulfil domestic obligations.

Additionally, women often face a networking gap, limiting their access to influential professional connections that are crucial for career advancement.

This underscores the need for focused efforts by firms, professional organisations and policymakers to support the career development and professional growth of women in accounting.

For example, the 2023 Global Gender Gap Index highlights Sweden as a leader in promoting gender equality, with high female educational attainment and robust parental leave policies.

Pregnant women in Sweden can take up to 390 days of maternity and parental leave, and women with children under eight are allowed to reduce their work hours by 25%. Such policies could help empower women, encouraging them to grow in their profession.”– UTAR Faculty of Business and Finance Department of Commerce and Accountancy head Dr Sonia Johanthan

Women at the fore

The recent appointment of Datuk Zaiton Mohd Hassan (pic) as vice president of ACCA marks the first time that women have held all three officer posts simultaneously in the global professional accountancy body, founded in 1904.

Zaiton joins fellow senior officers Ayla Majid, president and sustainability strategist from Pakistan, and deputy president Melanie Proffitt, from England, who is the chief financial officer of Farncombe Estate, a hotel group.

Together, they represent more than 252,500 members and 526,000 future members across 180 countries, a press release dated Nov 18 read.

Zaiton is the chief executive officer of the Malaysia Professional Accountancy Centre (MyPAC), a non-profit dedicated to helping students from poorer backgrounds pursue careers in finance. She also holds senior non-executive director positions, including chair of GX Bank, Malaysia’s first digital bank.

She was elected to ACCA’s Council in 2016 and previously served as president of the ACCA Malaysia Advisory Committee. Additionally, she has served as deputy chair of the International Federation of Accountants (IFAC) Professional Accountants in Business (PAIB) Committee.

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CAPITAL MARKETS: Maximising your unit trust returns

 

Unit trust is an investment vehicle that allows you to invest in a variety of asset classes, offering diversification benefits ■ It’s important to select the best of breed unit trust funds tailored to your asset class and target market to optimise your investment porfolio. when comparing investment options, look at both the investment fee and the overall ROI that the investment offers.

Unit trust is an investment vehicle that allows you to invest in a variety of asset classes, offering diversification benefits. However, to get the most out of them, it’s important to select the best of breed funds, diversify your investments globally and invest through channels with lower management fees.

■ When comparing investment options, look at both the investment management fee and the overall ROI that the investment offers

A COUPLE of weeks ago, I met with a middle-aged couple interested in getting serious about achieving financial freedom.

During our initial consultation, they mentioned that their current investments were in the form of unit trusts recommended by a friend, who is an agent.

However, when I inquired about the specific asset classes their unit trust funds were invested in, they struggled to answer and seemed confused.

This is not an uncommon scenario. Unit trust, one of the most popular investment types in Malaysia, is often misunderstood.

Its easy accessibility and affordability makes it a seemingly a friendlier option for beginners compared to more aggressive investments.

The fact remains, there are still many aspects that are misunderstood about unit trust funds. The ease of access masks the complexities.

So, in this article, we are going to reveal five truths about unit trusts that will help investors make better investment decisions.

Misconception 1: Unit trust is a type of investment

Truth 1: Unit trust is an investment vehicle

A common misconception among new investors is that a unit trust is a standalone investment that focuses on a single asset class, such as property, gold or shares.

In reality, unit trust is an investment vehicle that allows you to invest in a variety of asset classes, offering diversification benefits.

Think of it as a basket containing a mix of investments, like equities, bonds, or even real estate investment trusts. This differs from directly buying individual stocks, where you invest solely in the equity asset class.

For example, if you are looking to invest in Malaysia equities, one option is to directly purchase stocks from several Malaysian companies on the stock market.

Alternatively, you can also invest in a Malaysian equity-type unit trust fund. While the unit trust fund is managed by a fund manager, the asset class you are investing in remains essentially the same or similar.

The specific investment vehicle that you choose is not important. What is more important is the underlying asset classes that you choose to invest into, whether it is using unit trust, exchange-traded funds (ETFS), or other vehicles.

For instance, if you purchase

Malaysian equity unit trusts from three different fund houses, you may think that you are diversifying your investments.

But in reality, these Malaysian equity funds, despite being from different fund houses, still concentrate your exposure to a single market segment.

In essence, you are putting all your eggs into one basket, ultimately investing in a single asset class.

Misconception 2: Equity unit trust funds are as risky as other high-risk investments

Truth 2: Equity unit trust funds are much safer than other high-risk investments

Unit trust funds benefit from a third-party trustee structure, which acts as a safeguard by ensuring the fund’s assets are held on behalf of investors and invested according to the trust deed.

Compared to many other investment schemes, unit trusts are indeed much safer.

Why is that? To illustrate this, let’s take a look at the accompanying diagram.

There are three parties involved in a unit trust fund in Malaysia. The first party is the unit holder, which is you.

Let’s say you invest RM100,000 capital through your fund manager. The money does not actually go into the fund manager’s bank account; it goes into a trustee account, which duty is to hold and protect your capital.

The fund manager is responsible for identifying which equities to allocate the capital to, while the trustee buys and holds the shares according to the fund manager’s instructions.

The beauty of this unit trust model is that it protects your investment.

Even if the fund manager hypothetically goes bankrupt, and has to close its business, your capital is still safe.

This is because the trustee, not the fund management house, holds your money.

Therefore, when you invest in a unit trust fund, you not only getting a return on investment (ROI), but also a return of investment – the return of your capital that you had initially put in.

Misconception 3: Investing in one or two super-performing unit trust funds can grow our serious money effectively

Truth 3: To grow your wealth effectively, you need to diversify globally

The quest for the “best” unit trust fund is a common one, but is it the right approach?

Many investors believe that investing in a single unit trust is effective enough to grow their money in the long run.

The truth is, the way to ensure the growth of your portfolio is by diversifying your asset classes globally.

Take, for example, the impressive performance of the global equities, which have shown an upward trend over the past 30 years.

Several key factors contributed to this phenomenon, including a rising global population and advancements in technology that fuel global demand and productivity.

As many businesses worldwide experience growth and increase their profit, this translates into a rise in global equities.

In contrast, if you were to invest in a share or one fund that focuses on one sector or country, the growth would be unpredictable and less sustainable in the long run.

Therefore, to achieve sustainable growth in your unit trust ROI, ensure that you are diversifying your unit trust funds globally to optimise your growth.

Misconception 4: Unit trust funds are expensive

Truth 4: Unit trust funds can be either expensive or cheap, depending on the channel and market you invest in

One crucial cost to consider for unit trust investors is the sales charge, also known as a front-end fee, applied when purchasing from your chosen fund manager.

When investing in unit trusts through traditional channels, the fees can sometimes go as high as 5%.

It’s important to scrutinise these fees, as high fees can significantly eat into your portfolio’s performance.

For example, suppose your unit trust generates an 8% return in the first year. If the front-end fee charged by your fund house is 5%, your actual return becomes only 3%.

Fortunately, with the online investment platform options and corporate unit trust advisor channel available today, there are many platforms where you can find front-end fees as low as 2% or even lower.

This makes choosing the right channel crucial, as it significantly impacts the fees you pay.

When comparing management fees of your different investments side by side, it is also important to take into account not just the percentage of the fees, but the overall returns of each type of investment and the markets that you invest in.

For example, investors often compare unit trusts to ETFS. ETFS typically boast lower average annual management fees compared to unit trusts.

Due to these lower fees, ETFS might appear to have the potential for higher returns compared to unit trusts.

On the surface, ETF may seem like a better investment option. However, this is not true for all markets.

For example, the investment environment and opportunities in developing markets are vastly different from the developed markets.

In such cases, some unit trust funds managed by experienced professionals have a higher chance of outperforming ETFS despite the higher fund management fees.

Therefore, when comparing investment options, consider the bigger picture.

Look at both the investment management fee and the overall ROI that the investment offers.

Misconception 5: Any unit trust fund salesperson can help you access to the best of breed unit trust funds from the whole market

Truth 5: Only selected qualified advisors can help you access the best of breed unit trust funds from the open market

To optimise your investment portfolio, consider investing in the best of breed unit trust funds tailored to your asset class and target market.

This means that if you are looking to invest in an equity fund in the local market, you should ensure that you pick the best quality fund among all the Malaysian equity funds.

But how do you identify the “best” unit trust fund for your needs? It’s not as straightforward as it seems.

The reality is that many investors rely on bankers or unit trust agents to recommend funds for them to invest in.

However, relying on these recommendations might not be the best approach, as their choices are often limited to the funds offered by their own companies or fund houses.

Therefore, the best recommendation they can make may not be the best fund for you to invest in.

Let’s take the example of several Malaysia equity funds under a single fund house.

The best performing fund within the single fund house, Fund A has achieved an ROI of just under 60% over a five-year period, which is quite impressive.

However, when we broaden our horizons and compare Fund A’s performance to options available in the open market, we are faced with the truth that the fund we initially thought was the best performer (Fund A) ranks lower when compared to other Malaysian equity funds in the open market.

Even more striking, the actual top performer in the open market delivered nearly double the ROI!

In other words, by choosing the seemingly “best” fund within one company only, you could have missed out on potential gains of an additional 60% of ROI. That’s a significant difference!

To ensure that you’re not missing out on potentially better options, consider consulting with independent financial advisors who operate under corporate unit trust advisor company.

They can advise and recommend a wider range of unit trust funds in the open market, not just limited to options within a single fund house.

From the points that I shared above, you’re now equipped with a better understanding of the ins and outs of unit trusts.

Unit trust funds can be a valuable tool to effectively grow your money.

However, to get the most out of them, it’s important to select the best of breed funds, diversify your investments globally and invest through channels with lower management fees.

By following these steps, you can build a sturdy portfolio that will grow steadily in the long run and provide you the financial growth that you seek.

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“Many investors believe that investing in a single unit trust is effective enough to grow their money in the long run. The truth is, the way to ensure the growth of your portfolio is by diversifying your asset classes globally.”