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The National
01-05-2025
- Business
- The National
Digital gold: How crypto stacks up against the dollar and the most popular safe haven asset
In the aftermath of a chaotic economic scenario in which US-led tariffs upended stock markets and riled economic projections, gold has shone brightly, reinforcing its safe haven status. Also falling victim to the tariff mayhem were cryptocurrencies, although they seem to have held their ground pretty well, having been able to recover following a brief dip. As such, crypto proponents are touting digital assets as the new-age safe haven. Though cryptocurrencies are still flawed, they do not have physical limitations and are potentially higher-yield, and executives believe placing your money on them is a safer bet than physical commodities that are harder to move around and whose supply can be limited. The National spoke to them at the Token2049 Dubai summit on Wednesday to find out if gold has met its match. The purpose of cryptocurrencies has always been to be an alternative investment asset that is safe, at least according to how it's built – even though its biggest weakness might be its unpredictable and highly volatile nature. Economic volatility has traditionally lifted safe haven assets such as gold. The precious metal, considered a hedge against inflation, has been on a tear recently: it soared past $3,500 an ounce last week and is up by nearly a quarter in 2025. That was in response to economic and investor uncertainty stemming from tariffs introduced by the US, its subsequent trade war most notably with China and concerns over a global recession. Cryptos, meanwhile, after a record run triggered by US President Donald Trump's promise to embrace and "fight like hell" for the asset, wobbled amid his tariff episode, but has largely maintained their strength. The view whether or not cryptos are a safe asset will then largely depend on fundamentals and preferences. Gold and cryptos are "two considerably different things", but the latter, Bitcoin in particular, as "digital gold" is a narrative that's "really strong", said Kean Gilbert, Head of Institutional Relations of Lido Finance, the largest liquid staking solution for Ethereum. "The idea of having Bitcoin as digital gold and being able to transact with it and send it globally around the world without having to go through an intermediary is a really powerful use case," he told The National. That's compared with gold and "the physical narrative and carrying that in vaults for a younger generation, that might not be as appealing compared to an older generation that likes physical gold". Vincent Chok, the founder and chief executive of First Digital, which is the issuer of the world's fifth-biggest stablecoin by market capitalisation, agrees with the "digital gold" pitch. "Bitcoin ... is a lot easier than storing gold. You can see gold prices going well, but the reason why is because there's still a lot of people who are not familiar and do not know Bitcoin, so what they fall back [to] is gold," the told The National The dollar has also slumped in the wake of the economic chaos. That has highlighted, especially to those outside of the world's largest economy, "the realisation that the US economy or printed dollars are not as safe" as perceived, said Vugar Sade, chief operating officer of crypto exchange Bitget. "In most of the developing world, the dollar was the way you save your money and whenever you have an unstable economy, huge inflation or weaker currency, you would turn into dollars," he told The National. "But now people realise that dollars are losing value," he added, noting that, comparatively, the same situation applies to gold. Bitcoin, the world's first and biggest cryptocurrency, will be the "anchor", having proven itself over the past 10 years despite several crypto winters and industry scandals. It is also viewed as the "most important payment method" for artificial intelligence, the technology seen to shape the future society, said Ryan Chow, chief executive of Solv Protocol, the first on-chain Bitcoin reserve. Simply put, it's because "AI cannot take [physical assets such as] gold for payments", he told The National. The same could be said for dollars. In the early days of cryptocurrencies, people did not pay much attention to it, but its growth – and the wealth it generates – has legitimised its existence. While its utility is still both in its infancy and highly debated owing to the lack of oversight, it may be turning out that it might be built for unprecedented economic situations – not to mention in line with the future of digital finance. "It was born precisely for this moment that we have in time, where between tariffs and geopolitical uncertainty, you need to have something that you can sort of have as a backup," Yat Siu, co-founder and executive chairman of Hong Kong-based venture capital fund Animoca Brands, told The National. "When you think about something like crypto, you have to think of it as something that is uncorrelated from the rest of the world. It's an asset class that is a growth asset class that sits in this belief that the world is going to become." That means any uncertainty in the global economy can cement crypto use, as currencies that can be transferred freely and used as a store of value. Still, as with any asset, caution is the top priority; investors are urged to "stick to fundamentals", as there is no magic bullet or formula, said Changpeng Zhao, the founder and former chief executive of the world's biggest crypto exchange, Binance. "Don't get too excited. What happens in traditional investing markets, the same thing that happens here [in crypto]. Don't follow or buy just because you saw somebody tweet about it," he told an audience at Token2049. "Don't just follow blindly. Don't invest in a large number of tokens or coins. If you don't understand, don't invest ... if it doesn't work, pivot; if it works, then scale."
Yahoo
11-04-2025
- Business
- Yahoo
First Digital Trust Files Defamation Claim Against Justin Sun
Justin Sun's allegations that Hong Kong-based custodian First Digital Trust is insolvent have landed him in the cross-hairs of a defamation claim initiated by the company. First Digital's FDUSD stablecoin briefly de-pegged on April 3 after Sun claimed the company was "insolvent," though it has since virtually recovered, according to CoinDesk markets data. The writ of summons, the first step in a defamation claim, was filed late last week and requests the Hong Kong High Court to issue an injunction restraining Sun from making further statements on the matter. It also asks for an injunction requiring Sun to publish retractions. It also asks for the Court to issue an award for damages (though it doesn't specify how much) for "unlawful interference with the Plaintiff's contractual and business relationships" and "causing damage to the Plaintiff's business." In the time since Sun made his first claim on X that First Digital was insolvent, the Tron founder has since doubled down on the issue, holding a press conference late last week in Hong Kong alleging fraud and calling on the territory's regulators to reform rules around trusts. For its part, First Digital has posted examples of redemptions going through. A date for an initial court hearing has not been set. Sun has not yet filed a response, but posted on X that he "welcomes any legal process." A spokesperson for Sun had no comment on the matter. The case number is HCA 680 in Hong Kong's High Court.
Yahoo
04-04-2025
- Business
- Yahoo
First Digital to 'Pursue Legal Action' Over Justin Sun Allegations as FDUSD Drops
FDUSD, the stablecoin issued by Hong Kong-based First Digital, has wobbled from its $1 price peg as investor concerns mounted over its reserves, though the company said Wednesday that it was "completely solvent." FDUSD has dropped to 0.87 against Tether's USDT stablecoin and 0.76 against Circle's USDC on Binance, the main exchange where FDUSD is listed. Notably, bitcoin (BTC) also nearly hit 100,000 against FDUSD. The token has stabilized around $0.98-$0.96 later, still trading below its supposed price anchor. The sudden price action happened as CoinDesk earlier Wednesday reported that some of the TrueUSD stablecoin's reserve assets were stuck in illiquid investments, according to filings. Tron founder Justin Sun bailed out the issuer company. First Digital Trust, a trust company affiliated to First Digital, was appointed to manage TUSD reserves. "First Digital Trust (FDT) is effectively insolvent and unable to fulfill client fund redemptions. I strongly recommend that users take immediate action to secure their assets," Tron founder Justin Sun claimed in a Wednesday X post. First Digital refuted the allegations in an X post, saying that "First Digital is completely solvent" and "every dollar backing FDUSD is completely, secure, safe and accounted for with US backed T-Bills." "This is a typical Justin Sun smear campaign to try to attack a competitor to his business. As we told the reporter at CoinDesk, we have not yet had the opportunity to defend ourselves and instead of letting the TUSD matter be dealt with in court, Justin has instead resorted to a coordinated social media effort to try to damage FDUSD as a business competitor," the company said. "FDT will pursue legal action to protect its rights and reputation." FDUSD's latest monthly reserve report showed that the $2 billion of reserve assets were held mostly in U.S. Treasury bills and a lesser part in repo facilities and fixed deposits. Stablecoin analytics firm Bluechip told CoinDesk it gave FDUSD a C grade (on a scale from F as least safe to to A+ being safest) and expressed concerns over reserve assets being bankruptcy remote from the issuer company. "FDUSD appears to be backed by reasonably sound reserves. But we concluded that in case of bankruptcy, the reserves could be used to pay off the parent company's debt," Garett Jones, Bluechip's chief economist, said in a message. "It's hard to predict what would really happen in a crisis, but safer stablecoins do exist." UPDATE (Apr. 2, 17:58): Added analyst comment from Bluechip. Updated FDUSD price action.
