Today's Edition
BATOOL GHAITH (ABU DHABI)
Crypto volatility is increasingly being viewed as a sign of a more mature and institutionalised market structure, as the UAE positions itself among the world’s leading hubs for digital assets and fintech innovation.
Analysts say the current market cycle differs fundamentally from previous crypto downturns, driven by stronger institutional participation, regulatory clarity, stablecoin expansion and the growing integration of digital assets into broader financial infrastructure.
Speaking to Aletihad, Nagham Hassan, UAE Market Analyst at eToro, said one of the clearest signs of market maturity is the reduced severity of crypto corrections compared to previous cycles. “Compared with historical data, it shows that the market is maturing, and the biggest proof is in the size of the drawdowns,” he explained.
In previous cycles, Bitcoin regularly crashed between 80% and 94% from peak levels, while in the current cycle, BTC fell around 52% from its all-time high of $126,000 to roughly $60,000.
“That is still considered brutal by traditional market standards, but structurally it is a very different type of correction,” she added.
Derek Dai, Country Manager for Middle East and North Africa at Bybit, echoed that view, saying corrections are becoming a normal sign of a healthier market structure rather than instability.
“Corrections are a normal and healthy part of all financial markets, including traditional asset classes such as equities, gold and bonds. The difference today is that the crypto market structure has evolved significantly,” Dai told Aletihad.
According to Dai, stronger institutional participation, deeper liquidity and more sophisticated risk management have made the market structurally more resilient than in previous cycles.
“In recent months, despite geopolitical tensions and macro uncertainty, Bitcoin and major digital assets have shown notable resilience, which suggests the market is gradually transitioning from a purely speculative environment toward a more mature asset class,” he noted.
Both experts pointed to the approval of spot Bitcoin ETFs in the United States in 2024 as a major turning point that introduced a liquidity base previously absent from crypto markets.
Dai said the current cycle is also fundamentally different because digital assets are increasingly being viewed as part of broader financial infrastructure rather than purely speculative instruments. “This structural shift has helped improve market resilience compared to earlier cycles,” he explained.
According to Hassan, stablecoins are rapidly evolving from crypto trading tools into a part of the global financial system itself. “Stablecoins have outgrown crypto, they are becoming part of the global financial infrastructure, with the potential to upgrade the traditional financial system, as it settles transactions in seconds rather than days, moves value across borders without expensive intermediaries, and stays open 24/7,” she explained.
She cited McKinsey data showing stablecoin payment volumes reaching $390 billion in 2025, more than doubling year-on-year. Business-to-business payments accounted for $226 billion, while payroll and remittance transactions totalled $90 billion. Stablecoin-linked card spending also rose sharply to $4.5 billion.
“What started as a trading tool inside crypto markets is now moving into mainstream payments and treasury operations,” Hassan said.
Dai said stablecoin growth during periods of volatility actually demonstrates the increasing real-world utility of digital assets. “Stablecoins solve real-world financial challenges for faster settlement, lower transaction costs, 24/7 global transfers and easier access to dollar-based liquidity,” he explained.
He added that policymakers and financial institutions are becoming increasingly supportive of regulated stablecoin frameworks, accelerating convergence between traditional finance and blockchain infrastructure.
Both experts stressed that regulation has become a major turning point for the sector. Hassan said frameworks including MiCA in Europe, VARA in Dubai, ADGM in Abu Dhabi and the GENIUS Act in the United States significantly reduced fears that previously triggered panic selling.
“The GENIUS Act gave institutions something they had been waiting for: legal clarity around reserve backing and compliance standards,” she noted.
That clarity has encouraged major financial institutions to build stablecoin-based payment infrastructure, while stablecoin supply is expected to reach $3 trillion by 2030, according to US Treasury Secretary Scott Bessent.
Both analysts said the UAE’s rise as a global crypto and fintech hub stems from an early and strategic regulatory approach. “Most countries spent years debating whether crypto should be allowed at all, the UAE focused on building clear frameworks around it instead,” Hassan said.
She pointed to regulatory clarity provided by entities including Dubai Virtual Assets Regulatory Authority and Abu Dhabi Global Market as a key differentiator attracting companies and investors.
Dai similarly described the UAE as one of the world’s most forward-thinking jurisdictions for digital assets. “What makes the UAE particularly attractive is the combination of regulatory clarity, speed of execution, government openness to innovation, and strong global connectivity,” he said.
According to Hassan, tax advantages including zero personal income tax, zero capital gains tax on crypto for individuals and VAT exemptions on virtual asset activities have also strengthened the UAE’s attractiveness compared to other markets.
But both experts stressed that the UAE’s biggest advantage lies in how the government itself views digital assets. “The country has treated blockchain and digital assets as part of long-term economic infrastructure rather than a temporary trend,” Hassan said.
Dai added that the UAE is approaching digital assets not only as a trading industry, but as part of future financial infrastructure, including payments, tokenisation, digital identity and cross-border settlement.
Projects such as the Digital Dirham, tokenisation initiatives and blockchain integration into government systems show the UAE is positioning itself as an active builder within the digital asset economy, according to both analysts.
“The UAE succeeded because it treated crypto as an economic layer to build on, not a threat to manage,” Hassan said.
Dai added that the country could eventually become one of the global leaders shaping the future of digital finance and regulated digital asset adoption. Virtual assets already contribute Dh2.2 billion to Dubai’s GDP, with an official target to increase that figure to Dh13 billion, or roughly 3% of GDP.
“It is a measurable economic target backed by more than 40 licensed firms and roughly Dh2.5 trillion in annual transaction volumes,” Hassan added.
Despite the sector’s institutional growth, both analysts stressed that crypto remains highly exposed to macroeconomic and geopolitical risks. “The crypto market has no earnings floor, no central bank backstop and never closes, every macro signal hits it first,” Hassan said.
