(MENAFN- Khaleej Times)

Investors in the UAE are steadily leading the global crypto race, and the numbers help explain exactly why.

A 2025 wealth-insights report by Avaloq shows 39 per cent of affluent to ultra-high-net-worth UAE investors currently hold crypto assets - significantly ahead of the 30 per cent global average. This strong appetite is reinforced by a raft of additional data pointing to deep-seated adoption, institutional involvement and regulated infrastructure.

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First, on the adoption front: independent studies show that roughly 30.4 per cent of the UAE's adult population - about 3 million people - own cryptocurrencies. Meanwhile, the emirates received an estimated $34 billion in crypto inflows between July 2023 and June 2024, up about 42 per cent year-on-year. One adoption index gave the UAE a score of 98.4 out of 100, citing a 210 per cent year-on-year growth in crypto adoption and a top-ranking 25.3 per cent ownership rate.

So what lies behind this surge? Several factors operate together. Regulatory clarity is front and centre. The Virtual Assets Regulatory Authority (Vara) in Dubai, free-zone licensing regimes and zero tax or capital-gains tax regimes for crypto gains make the UAE extraordinarily investor-friendly.

Analysts say that favourable rules, plus a strong government push for digital economy development, create a fertile environment for both retail and institutional crypto activity.

They argue that institutional momentum adds weight. In March 2025, Abu Dhabi-based investment firm MGX Fund Management invested $2 billion in the world's largest crypto exchange, Binance - a signal of heavy-duty institutional backing in what many think is a maturing digital-asset market.

On the infrastructure side the exchange market in the UAE already generated nearly $1 billion in revenue in 2023 ($ 996.1 million) and is forecast to grow to about $5.35 billion by 2030 - a compound annual growth rate of around 27.1 per cent.

Then there's the demography and behaviour component. A youthful, tech-savvy population (with large expatriate proportions) is comfortable with digital asset models. Studies show that among young adults aged 25-34 in the UAE, over 74 per cent reported active interest in cryptocurrencies, and 21 per cent said they planned to trade in the next 12 months. On the investor-behaviour side, the Avaloq survey found only 20 per cent of UAE crypto holders manage those assets through their wealth manager, yet 51 per cent of non-holders say they would invest if their traditional institution offered crypto services. That points to both demand and an opportunity gap.

Avaloq's regional director, Akash Anand, commented:“Strong UAE investor appetite for crypto runs ahead of the global trend.” He noted the gap between demand and the extent to which traditional wealth-managers are configured to meet it. It is not just about access, he argues:“This is not just about buying digital coins – it is about harnessing a broader digital-asset ecosystem to build future wealth.”

Some analysts, however, argue that the story has two sides. While adoption is strong, many investors cite barriers: market volatility (38 per cent), lack of knowledge (36 per cent) and distrust of exchanges (32 per cent) remain major reasons for non-participation. That highlights the importance of education and robust infrastructure, they said.

Additionally, competition among wealth managers is intense - 63 per cent of UAE investors have changed advisors or considered doing so, citing cost (51 per cent), lack of transparency (45 per cent) and trust (44 per cent) as top issues.

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