This report was prepared by Tiger Research. While the cryptocurrency market is growing rapidly, the number of retail investors is declining. We analyzed the barriers to entry in nine Asian markets with the largest potential user bases, as well as exchanges’ responses.
- The Market Is Growing, but Retail Is Shrinking
Since the U.S. approved spot ETFs in 2024, institutional capital has flooded in. Corporations have added Bitcoin to their balance sheets. Exchanges have begun tokenizing major U.S. equities. The barriers between traditional finance and crypto are collapsing from both sides. Market scale has expanded significantly.
Yet retail development is moving in the opposite direction. Retail trading volumes and user counts are falling across jurisdictions. In previous cycles, high-yield altcoins attracted a flood of new users—but that driver has vanished. Altcoin volatility has subsided. Bitcoin’s market share has reached ~60%. There is currently no mechanism to attract new users—only existing ones remain.
Nonetheless, major exchanges are deploying a suite of strategies to draw in new users. They refer to these prospective investors as “crypto-curious”: people who understand crypto, are interested in it, but haven’t yet invested. Given the population size and internet penetration rates in Asia’s major countries, this cohort numbers in the tens of millions. As growth among existing users hits a ceiling, the crypto-curious will become the decisive factor shaping the industry’s next phase.
Volatility is the most frequently cited barrier—but it is merely a surface symptom, not the root cause. Stocks are volatile too, yet people still buy them because of government regulation, investor protection, and social legitimacy. Crypto lacks all three. Five core barriers impede those interested in crypto: regulatory uncertainty, security risks, tax burdens, usability, and social perception.
- Analysis of Crypto Interest Across Key Asian Markets: Barriers Vary by Country
2.1 Northeast Asia: South Korea, Japan, Hong Kong
Northeast Asia is the fastest-evolving region for crypto regulation. All three markets have either already established dedicated legal frameworks or licensing regimes—or are about to launch them. Yet regulatory directions and market characteristics differ sharply: South Korea boasts a deeply entrenched speculative trading culture; Japan exhibits a unique trading structure centered on XRP; and Hong Kong aims to build a global hub focused on institutional investors.
2.1.1 South Korea: Second-Largest User Base—But Declining
In Asia, South Korea hosts the most active fiat-to-crypto trading. In H2 2025, KRW trading volume hit $663 billion—ranking second globally. Although user count rose 11% quarter-on-quarter, daily trading volume and fiat deposits declined. Equities are becoming a more attractive investment alternative, and interest in crypto is waning. Users are also migrating to offshore exchanges to access unlisted tokens and leveraged products.
2.1.2 Japan: Safest—and Most Expensive
Japan is Asia’s safest crypto market—and also the most expensive. Following the 2014 Mt. Gox incident, Japan became the first country to institute an exchange licensing regime. However, the top marginal tax rate on crypto gains stands at 55%, starkly contrasting with the 20% rate applied to equities. Japan is also the only market globally where a single altcoin (XRP) trades more than Bitcoin. A key variable lies in two reforms scheduled to take effect in April 2026—including harmonizing the crypto tax rate to 20%.
2.1.3 Hong Kong: Three Barriers Cleared—but Access Still Blocked
Hong Kong excels across three dimensions: regulatory clarity, high security standards, and zero crypto taxation. Yet the remaining hurdle is accessibility. Currently, licensed services primarily target professional investors with assets of HK$8 million or more. Hong Kong’s task is to widen the gate—to let more people experience the trust it has already built.
2.2 Southeast Asia: Singapore, Thailand, Indonesia, Vietnam, Philippines, Malaysia
2.2.1 Singapore: All Conditions Met—Yet 65% Still Opt Out
Singapore scores most evenly across the five barrier dimensions—and levies no crypto tax. Yet while public awareness of crypto stands at 94%, actual ownership is just 29%. This shows that removing barriers alone does not convert the crypto-curious.
2.2.2 Thailand: Government-Led Market Opening
Thailand is the market where the government most directly signaled “you may enter.” In January 2025, it announced a five-year exemption from personal income tax on gains from licensed-exchange transactions. It pursues a dual-track strategy—cracking down on illicit activity while expanding the scope of legal activity—and actively promotes institutional capital channels.
2.2.3 Indonesia: From Commodity to Financial Asset
In January 2025, Indonesia reclassified crypto from a “commodity” to a “digital financial asset,” transferring regulatory authority to the Financial Services Authority (OJK). This signals that crypto is now a “government-recognized financial product.” Its potential lies in its 280-million-strong population base.
2.2.4 Vietnam: Public Adoption Ahead of Regulation
Vietnam’s adoption is already high—regulation must catch up. The government has passed the Digital Technology Industry Act and launched a five-year pilot program for crypto asset markets. Currently, banks and securities firms’ subsidiaries dominate the issuance of pilot licenses.
2.2.5 Philippines: A Crypto Market Built on Daily Life—not Investment
In the Philippines, crypto adoption stems from everyday life—such as play-to-earn (P2E) games and stablecoin remittances. The market currently faces security risks, but the government is improving conditions—by exiting the FATF grey list and supporting a Bitcoin reserve strategy, among other measures.
2.2.6 Malaysia: Regulation Exists—but Choice Is Limited
Malaysia has an established regulatory framework—but market choice remains narrow. With few tradable tokens available, investors often turn to unregistered offshore platforms. The government has recognized this issue and is working to revise the framework to streamline listing processes.
- How Exchanges Can Attract the Crypto-Curious
3.1 Licensing: The Right to Operate
As regulatory systems mature across Asia, operating without a license has become nearly impossible. Exchange strategies fall into two models: volume-driven expansion versus building compliance as a trust cornerstone in specific markets. Simply being inside the regulatory framework is itself a competitive advantage.
3.2 Transparency and Security: “Can I Trust Them to Hold My Money?”
The most direct answer an exchange can offer is transparency. Proof-of-Reserves (PoR) disclosures have become an industry standard—and security is increasingly becoming a regulatory minimum requirement. For users, the critical question is: “If a security incident occurs, will my assets be protected?”
3.3 Education and Localization: Reaching Users in Local Language and Fiat
Educational content is no longer a differentiator—the real distinction lies in where and how that content is delivered. Global exchanges are deepening online resources while integrating offline guidance—and executing localization strategies featuring native-language support and local-fiat payment rails.
- Now—Before the Next Bull Run
Bull markets drive massive conversion—but if nothing changes, they’ll keep attracting users, only to push them away again. As traditional finance (TradFi) expands into crypto, exchanges must offer broader token selection, DeFi access, and onchain experiences—all presented in ways users can understand. Asia has the potential to become crypto’s next growth engine—but that depends entirely on whether exchanges are ready.
[Tiger Research]
Tiger Research Report: Asian Retail Crypto Market Analysis – Implications and Opportunities
The recent Tiger Research report analyzing retail investor dynamics across nine major Asian markets provides critical insights into the evolving landscape of cryptocurrency adoption in the world’s most populous region. The findings paint a complex picture of market divergence, regulatory fragmentation, and untapped potential that should inform investment strategies for the coming cycle.
Market Divergence: Institutions Surge as Retail Retreats
The report confirms what many have observed: while institutional capital pours into crypto following the US spot ETF approvals, retail participation is simultaneously declining. This creates a bifurcated market dynamic with significant implications for token prices and market structure.
The data reveals that Bitcoin’s market share has reached approximately 60%, with altcoin volatility subsiding—suggesting a flight to quality among remaining retail participants. This consolidation favors established, regulated projects and poses challenges for smaller altcoins seeking retail attention. The absence of a “new narrative” to attract retail capital, which has historically driven cycles, makes the current environment particularly challenging for speculative assets.
For investors, this reinforces the importance of differentiating between institutional-grade projects and those reliant on retail hype. Tokens with clear utility, regulatory clarity, and strong institutional backing are better positioned for the current market environment.
Regional Regulatory Arbitrage and Market Fragmentation
Asia’s regulatory landscape remains a patchwork of approaches, creating both risks and opportunities for market participants. The report highlights how regulatory uncertainty remains the primary barrier to entry, though manifestations vary significantly by jurisdiction.
In South Korea, the second-largest user base is experiencing decline as traders migrate to offshore exchanges to access unlisted tokens and leveraged products. This regulatory arbitrage, while creating immediate opportunities for unregistered platforms, ultimately undermines market integrity and investor protection—a precarious equilibrium that regulators will likely seek to disrupt.
Japan’s 55% marginal tax rate on crypto gains starkly contrasts with the 20% rate applied to equities, creating a significant disincentive for retail participation. The scheduled tax harmonization to 20% by April 2026 presents a clear catalyst that investors should monitor closely, as it could unlock significant retail capital currently sitting on the sidelines.
Hong Kong’s approach—providing regulatory clarity and security standards while limiting access to high-net-worth individuals—represents a missed opportunity. The report correctly identifies that widening access to the broader public could unlock significant growth, given the trust foundation already established.
For investors, the key takeaway is the importance of regulatory risk assessment in project evaluation. Projects navigating complex Asian regulatory landscapes successfully will gain significant competitive advantages, while those operating in regulatory gray areas face increasing headwinds.
The “Crypto-Curious” Gap: Awareness vs. Ownership
The report’s most striking finding may be the significant gap between crypto awareness and actual ownership, exemplified by Singapore where public awareness stands at 94% while ownership is just 29%. This suggests that removing barriers alone does not sufficiently convert the interested into participants.
This disconnect points to deeper issues beyond regulatory uncertainty or security concerns—it suggests that crypto has yet to achieve mainstream social legitimacy comparable to traditional financial assets. The absence of government endorsement, investor protection frameworks, and normalized social acceptance creates a psychological barrier that transcends practical concerns.
For investors, this highlights the importance of evaluating projects based on their ability to bridge this gap. Tokens that successfully demonstrate real-world utility, integrate with daily financial activities, or address specific pain points in high-potential markets may be better positioned to convert awareness into adoption.
Southeast Asia: Untapped Potential Amidst Regulatory Catch-Up
The report correctly identifies Southeast Asia as the region with the highest growth potential, though regulatory frameworks are still evolving. Indonesia’s reclassification of crypto from a “commodity” to a “digital financial asset” represents a significant policy shift that could unlock its 280-million-strong population base.
Vietnam’s case is particularly interesting, with public adoption outpacing regulation. This creates both opportunities and risks—opportunities for first-mover projects that establish market presence before formal regulation, but risks for investors in a potentially unstable regulatory environment.
The Philippines’ unique approach—where crypto adoption stems from everyday activities like play-to-earn games and stablecoin remittances rather than investment—suggests that practical utility may be more effective at driving adoption than speculative narratives.
For investors, Southeast Asia represents a high-risk, high-reward frontier. Projects that demonstrate clear utility in addressing local needs while establishing regulatory compliance ahead of formal frameworks may yield significant returns.
Exchange Strategies and Competitive Advantages
The report identifies three key pillars for exchange success in Asian markets: licensing, transparency/security, and education/localization. These strategies reflect a maturing market where compliance and trust are becoming more important than aggressive growth tactics.
Notably, the report suggests that “simply being inside the regulatory framework is itself a competitive advantage”—a significant shift from the previous cycle’s emphasis on growth at all costs. This indicates that we’re entering a more mature phase of market development where regulatory compliance is becoming a key differentiator.
For investors, this reinforces the importance of evaluating exchange tokens based on their ability to navigate increasingly complex regulatory environments while maintaining competitive product offerings.
Strategic Implications for Investors
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Differentiate Between Market Cycles: The current environment favors institutional-grade projects over retail-focused speculative assets. Bitcoin dominance and reduced altcoin volatility suggest we’re in a “quality over quantity” phase.
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Monitor Regulatory Catalysts: Tax reforms in Japan and potential regulatory shifts in other Asian markets could unlock significant retail capital. Investors should position ahead of these catalysts where possible.
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Focus on Utility-Driven Projects: Projects that solve real problems in high-potential Asian markets—particularly in areas like remittances, DeFi access, and everyday payments—may outperform pure speculative assets.
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Prioritize Regulatory Compliance: As regulatory scrutiny intensifies, projects and exchanges with strong compliance frameworks will gain competitive advantages and attract institutional capital.
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Southeast Asia as Growth Frontier: While higher risk, Southeast Asia represents the most significant untapped retail market. Projects with localized solutions and early regulatory positioning may benefit disproportionately.
The report ultimately concludes that Asia has the potential to become crypto’s next growth engine, but this depends on whether exchanges and projects can address the fundamental barriers preventing the “crypto-curious” from becoming actual participants. For investors, this suggests a strategic focus on projects that bridge this gap through utility, compliance, and localized solutions.