The 'Bitcoin-like' nature of Singapore assets: a unique investment perspective

Against the backdrop of increasing global economic and political uncertainties, assets in Singapore and bitcoin seem to exhibit surprising similarities in certain aspects. This article will explore the 'bitcoin-like' characteristics of Singaporean assets, analyze their hedging function, scarcity, and global features, and how investors can use this perspective to develop strategies.

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1. Common Points between Singapore Assets and Bitcoin

1. Hedge Attributes

Bitcoin is known as the 'digital gold' and is seen by investors as a tool for hedging risks during global geopolitical conflicts, currency devaluation crises, and other crises. Similarly, Singapore assets attract global capital inflows with its political stability, transparent legal system, and efficient international policies to meet hedging demands. In times of global turmoil, both Bitcoin and Singapore assets often receive inflows of capital.

2. Characteristics of Globalized Assets

Bitcoin is a decentralized transnational asset that does not rely on any single country or entity, with users distributed globally. Singapore assets leverage the unique position of this international city, attracting investors and businesses from around the world. Both exhibit cross-regional attractiveness, relatively detached from economic risks in a single region.

3. Scarcity and Appreciation Potential

Bitcoin's scarcity stems from its fixed total supply of 21 million coins, while Singapore assets (such as upscale residences, land, and high-quality financial assets) are influenced by geographical and resource constraints, driving their long-term appreciation potential. This scarcity positions both assets uniquely in the capital markets.

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2. Significant Differences Between Singaporean Assets and Bitcoin

While there are similarities, there are significant differences between Singaporean assets and Bitcoin in terms of risk attributes and investment logic:

1. Volatility Difference

Bitcoin is known for its extremely high price volatility, often experiencing drastic fluctuations in the short term (with a volatility exceeding 40% per year), attracting a large number of short-term speculators. Singaporean assets (such as the stock market or real estate), on the other hand, have lower volatility, showing more stable long-term performance, making them suitable for investors preferring safety and stable returns.

2. Intrinsic Value Foundation

Bitcoin is essentially a digital asset, lacking direct intrinsic value support and its price heavily relies on market sentiment. Singaporean assets, on the other hand, have real economic activities, corporate profits, and a stable market foundation as support, making their value more transparent and reliable.

3. Policy Support and Regulatory Environment

Bitcoin faces uncertainties in policies of various countries around the world, such as exchange bans or regulatory adjustments, leading to higher investment risks. In contrast, Singaporean assets benefit from stable policy support of the local government and a clear legal framework, resulting in stronger investor confidence.

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How does the 'bitcoin nature' of Singaporean assets affect investment strategies?

1. Capital flows in times of risk aversion

During times of global uncertainty intensification (such as geopolitical conflicts, economic turmoil, etc.), investors often choose safe-haven assets. At this time, Singaporean assets and bitcoin may both benefit. However, it is important to note that the motivations driving the inflow of funds for the two are different, with bitcoin relying more on speculative psychology, while Singaporean assets are a stable and rational safe-haven choice.

2. Scarcity and supply-demand dynamics

Bitcoin is sought after due to its scarcity, and Singaporean assets (especially high-quality real estate and high-end financial instruments) also possess similar characteristics. This means that scarcity-driven supply-demand dynamics may lead Singaporean assets to exhibit value growth patterns similar to bitcoin during specific periods.

3. Innovation and support of forward-looking technologies

Bitcoin represents the innovation of digital assets, while Singapore, as a global center for fintech and blockchain technology, also demonstrates forward-thinking. For example, the Singaporean government's support for digital currency trading and blockchain technology makes its asset markets more attractive and to some extent also possess attributes of a 'cryptocurrency ecosystem'.

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4. How to utilize the 'bitcoin nature' to invest in Singapore assets?

1. Pay attention to market correlation

Investors can determine the correlation between bitcoin and Singapore assets under risk aversion by observing their performance. For example, when there is a surge in global risk aversion, can one simultaneously bet on bitcoin and Singapore assets? It is necessary to use data to verify the correlation between the two to assist in the judgment.

2. Combination of high volatility and low volatility

Consider bitcoin and Singapore assets as two extremes of an investment portfolio: bitcoin bears high-risk high-volatility returns, while Singapore assets offer stable low-volatility returns, forming a certain level of complementarity between the two.

3. Balancing long-term value and short-term opportunities

Bitcoin is more suitable for short-term speculators, while Singapore assets are more suitable for long-term investors. Therefore, investors need to balance the allocation of the two based on their risk preferences and financial planning.

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Conclusion: Does the 'bitcoin-like' nature of Singapore's assets have long-term value?

The 'bitcoin-like' nature of Singapore's assets is mainly reflected in its hedging function, scarcity, and attractiveness in global capital flows. However, compared to the highly volatile bitcoin, Singapore's assets are more stable and have a clearer long-term value support. During global turbulent periods, both may indeed exhibit similar trends of capital inflow, but the security and predictability of Singapore's assets make them more suitable for most investors.

Recommendations: stop loss on stocks with large unrealized losses, maintain remaining positions. People currently lack confidence, so it is better to wait for opportunities before increasing positions on the right side.

For conservative investors, Singaporean assets can be used as core holdings to leverage their long-term appreciation potential.

For investors with higher risk tolerance, they can monitor the bitcoin market while analyzing trends in the Singapore asset market to find potential correlated investment opportunities.

Ultimately, the 'bitcoin-like' nature of Singapore's assets is more of a complementary perspective rather than a simple substitute.

Amid the current global financial uncertainty, understanding and utilizing the 'bitcoin-like' nature of Singapore's assets undoubtedly provide investors with a unique and practical strategic direction.