PETALING JAYA: Although cryptocurrencies’ ascent seems to be running out of steam amid volatile trading, investors’ interest in the asset class remains high.

The asset class has lost some of its shine of late – the price of Bitcoin, flagship of the cryptos, has fallen more than 41% to RM153,433 as of last Friday from an all-time high of RM262,905.41 on April 13, 2021. In contrast, the rebound in equities, bonds and commodities from a pandemic-induced slump has gathered momentum.

Digital asset exchange (DAX) Tokenize’s founder and CEO, Hong Qi Yu, observed that investors’ appetite for cryptocurrencies has not wavered despite the increase in volatility. He noted that the platform saw the number of transactions soar to an all-time high in May.

“After a high, it is a natural progression for investors to quiet down as they pause and take stock of the situation,” Hong told SunBiz.

On the whole, he said, most of the clients are long-term holders, who typically hold their investment for a six- to 12-month horizon. Nonetheless there are some traders on its platform who trade more frequently, seeking benefits from arbitrage – simultaneous purchase and sale of an asset in different markets in order to benefit from price variations.

For Tokenize, the split between long-term holders and traders is roughly 90:10 respectively and the proportion has remained largely unchanged despite the spike in volatility. In regard to new users, the CEO disclosed that the number of signups in the first quarter of 2021 has seen a threefold jump year-on-year.

For the coming year, Hong remains buoyant about the asset class’ prospects and investor interest, and he has laid the groundwork to introduce 10 or more digital coins in 2022.

Another DAX, Luno, said its trade volume remains very healthy.

The platform’s country manager, Aaron Tang, said that despite the recent price falls, it regularly sees the 24-hour trading volume for Bitcoin alone to be more than 100 BTC per day which translates to around RM15 million at an average price of RM150,00 per BTC.

“There have been some days when the market is quieter. However Luno’s volumes correlate well with other leading exchanges all over the world,” he said.

The DAX still sees strong interest in customer signups. Tang said has had a steady increase in registrations since last year with a spike in the first two quarters of this year.

“Currently, we regularly see more than a thousand customers sign up daily. As of now, Luno has more than 300,000 customers in Malaysia, indicating a positive trend of cryptocurrency demand in Malaysia,” he said. In 2020, the exchange signed up an estimated 70,000 customers.

On the ground, digital marketer Daniel Khong shared that his investment in the asset class started in 2018 but grew more aggressive this year because of the hype surrounding cryptocurrencies.

Given the precarious market conditions, the retail investor looks for projects with high potential and good scalability and has invested in a number of cryptocurrencies such as Ethereum, Matic, ONE, ADA and ALGO.

“The volatility means you can’t take more risks so it really brings you back to the fundamentals of investing, which are – do not be greedy, invest less in hype, more in fundamentally strong projects and not be in just for the potential ‘quick buck’ that many people are in for,” said Khong, who tends to take a staking approach, investing in a particular cryptocurrency for an average of 30 days or so.