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How the Gulf conflict recast risks for Asian investors in Dubai

How the Gulf conflict recast risks for Asian investors in Dubai
Asian digital entrepreneurs that once saw Dubai as a safe, well-connected base for global expansion are now reassessing that view after the US-Israel war on Iran exposed vulnerabilities in the city’s appeal as a financial and technology hub.
For many investors and founders from India, China and Southeast Asia, the strain is not just about physical security but also about what disruption around the Strait of Hormuz has revealed about liquidity, credit and market confidence.

Dubai has in recent years positioned itself as a premier global hub for digital businesses focused on technologies such as artificial intelligence, fintech and blockchain, helped by policies including 100 per cent foreign ownership and tax incentives.

But the Iran conflict – during which Tehran has targeted cities such as Dubai and Abu Dhabi with drone and missile attacks – has left many businesses facing not only a security threat, but also higher borrowing costs and greater uncertainty over capital flows, according to analysts.

Last month, the central bank of the United Arab Emirates announced a “resilience package” to provide liquidity support and bolster the banking sector, but analysts said the broader ecosystem still faced challenges in maintaining liquidity and building resilient supply chains.

“For technology companies, the risks are less about physical infrastructure and more about financial infrastructure, especially as broader tensions affect market confidence or key routes like the Strait of Hormuz,” said Rafiza Ghazali, managing director for consumer banking at Fasset, a banking and investment platform focused on emerging markets.

The disruption of shipping through the Strait of Hormuz amid the Iran war sent oil prices soaring by 60 per cent to around US$100 per barrel within a month and spurred severe liquidity crunches in the freight market. It also increased operational risks and regulatory compliance challenges.

While a shaky US-Iran ceasefire has allayed some investor concerns, uncertainty remains about whether this pact will hold and lead to a complete reopening of the Strait of Hormuz.

“While it is difficult to precisely predict outcomes at this stage, any constraints are likely to be episodic and sentiment-driven rather than sustained,” Ghazali said. “I would view this more as a stress test rather than a structural shift.”

The demand for cross-border financial services would remain over the longer term, he said, adding that companies that had built strong fundamentals would remain resilient.

Dubai has attracted substantial amounts of Asian capital in recent years, with India the biggest single source of foreign direct investment into the emirate in 2024, accounting for 21.5 per cent of total inflows, according to official data. Dubai said total FDI reached 52.3 billion dirhams (US$14 billion) last year.

Many Asian financial and digital firms now use Dubai as a base for expansion across the Middle East, Africa and South Asia, often setting up in the Dubai International Financial Centre (DIFC), the city’s main financial hub. DIFC says it serves a 77-country region and hosts more than 1,670 innovation and tech firms.

Some have expanded their presence there in recent months, including India’s Juspay, which opened its regional headquarters in DIFC in February, and Singapore-based Dymon Asia Capital, which opened its first Middle East office in Dubai in late 2024.

The war with Iran has also disrupted critical transport infrastructure, with Dubai International Airport temporarily suspending some operations after drone incidents and Jebel Ali Port, one of the world’s busiest, facing stoppages after attack-related damage and debris.

“Most critically, digital infrastructure such as data centres and cloud services has been directly targeted, threatening service continuity,” said Anndy Lian, a Singapore-based adviser to governments on blockchain and IT.

The six-week conflict was already beginning to shift sentiment among a section of Asian investors, though most saw the situation as a temporary setback rather than a permanent strategic shift, he added.

“Investor sentiment has shifted towards capital flight, with some wealthy Asians relocating liquid assets to Singapore or Hong Kong,” he said, adding that other locations such as India and select European gateways had also gained attention.

Business resilience

Lian said the overall resilience of the business ecosystem for investors in the UAE remained strong, although a prolonged conflict could amplify risks for Asian investment portfolios in the region.

“At this stage, you’re realistically looking at 20 to 40 per cent of previously accessible capital becoming difficult to access,” said Raj Kapoor, president of the India Blockchain Alliance, adding that this would affect start-ups at a growth stage, real estate players and venture capital firms in particular.

“If the conflict is short-lived, markets would normalise quickly and most of this capital ‘comes back,’ he said.

The key issue was not any single threat, but how multiple risks occurring simultaneously due to geopolitics and security exposure were amplifying impact and uncertainty, Kapoor said.

“Dubai has long been viewed as insulated from regional conflict, but recent Iranian threats and strikes targeting Gulf infrastructure, including energy assets and data centres, have tested that assumption,” he added.

Investors remain hopeful that the situation will eventually stabilise.

Sunyong Hwang, CEO of Abu Dhabi-based blockchain company NEXPACE, said the Gulf region had built itself into a meaningful destination for Asian digital entrepreneurs and investors because of regulatory clarity and government-led digital investment with a long-term vision.

“Geopolitical uncertainty tests those foundations, and we continue to monitor developments closely,” he said.

“From our perspective, however, our global headquarter presence in Abu Dhabi has always been rooted in long-term strategic orientation. That calculus does not change in the face of short-term disruption.”

 

Source: https://www.scmp.com/week-asia/economics/article/3349694/how-gulf-conflict-recast-risks-asian-investors-dubai?module=perpetual_scroll_0&pgtype=article

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Musk, markets, and money: Trade risks meet crypto rewards

Musk, markets, and money: Trade risks meet crypto rewards

The world is watching as the July 9 deadline for trade deals approaches, casting a shadow of uncertainty over global markets. Meanwhile, a mix of economic data, policy decisions, and influential voices, like that of Elon Musk, are shaping a complex narrative.

Let’s explore what’s happening in the market right now, weaving together the threads of trade tensions, market performances, and emerging trends in crypto, all while offering my perspective on what these developments might mean for investors and the global economy.

Global risk sentiment and the trade deadline

The global risk sentiment is palpably tentative as the July 9 deadline for trade negotiations looms. This date marks the end of a 90-day tariff pause, a period during which the United States and its trading partners have been working to finalise agreements.

On July 7, President Donald Trump announced that the first 12 letters would be sent to these partners, signalling that new tariff rates potentially ranging from 10 per cent to 70 per cent could take effect as early as August 1 if no deals are reached. This wide range of possible tariffs introduces significant uncertainty, as the final rates will depend on the outcomes of these negotiations, which remain fluid and unpredictable.

The threat of tariffs could pressure trading partners into concessions, potentially strengthening the US position in global trade. On the other hand, the prospect of higher tariffs risks disrupting supply chains, increasing costs for consumers, and slowing economic growth, particularly for export-dependent economies.

Markets hate uncertainty, and the lack of clarity around these tariffs is keeping investors on edge, contributing to a cautious global mood. As the deadline nears, every statement from the White House and every response from trading partners will be scrutinised for hints of what’s to come.

US markets: A pre-holiday boost

Turning to the US, equity markets were closed on July 4 for Independence Day, but their performance prior to the holiday offers a glimpse into investor sentiment. On July 3, Wall Street ended in the green, with the S&P 500 rising 0.8 per cent , the Nasdaq climbing one per cent, and the Dow Jones Industrial Average also advancing 0.8 per cent.

This uptick was driven by a stronger-than-expected employment report, which likely bolstered confidence in the US economy’s resilience. Robust job growth suggests that consumer spending, a key driver of economic activity, remains robust, providing a buffer against external pressures, such as trade tensions.

However, the holiday closure meant that US investors couldn’t immediately react to subsequent developments, such as Trump’s trade letter announcement or moves in Asian markets. US equity index futures have since pointed to a lower opening, suggesting that these global uncertainties may temper the optimism sparked by the employment data.

In my view, the US market’s pre-holiday strength is a positive signal, but it’s not immune to the broader risk-off tone emerging elsewhere. Investors will likely reassess their positions as trading resumes, weighing domestic economic health against international risks.

Asian markets: A risk-off tone prevails

Closer to home in Asia, the mood is decidedly more cautious. Major equity indices have posted declines, reflecting a risk-off sentiment among investors. South Korea’s KOSPI fell 1.99 per cent, Taiwan’s TWSE dropped 0.73 per cent, Thailand’s SET declined 0.64 per cent, and Hong Kong’s HSI also shed 0.64 per cent.

These markets, heavily tied to global trade, are particularly vulnerable to the spectre of US tariffs. For instance, South Korea and Taiwan rely heavily on exports of electronics and semiconductors. At the same time, Hong Kong serves as a financial hub that is sensitive to shifts in global capital flows.

Commodities: OPEC+ shakes up oil markets

In the commodities space, oil markets are grappling with their own set of dynamics. Over the weekend, OPEC+, the alliance of oil-producing nations, agreed to boost production by 548,000 barrels per day starting next month, a move that exceeded market expectations.

As a result, Brent crude prices dipped 0.6 per cent to settle at US$71 per barrel. This increase in supply comes at a time when demand uncertainties, fuelled by trade tensions, are already in play.

This production hike is a strategic play by OPEC+ to maintain market share, but it’s a gamble. If global growth slows due to tariffs, the additional supply could outstrip demand, pushing oil prices lower and squeezing revenues for producers. Conversely, if trade talks resolve favourably and economic activity picks up, this move could stabilise prices and prevent a supply crunch.

For now, the drop in Brent crude signals bearish sentiment, and it’s a development that bears watching. Lower oil prices could ease inflation pressures but might also signal broader economic weakness.

Cryptocurrency: Bitcoin bounces back

Shifting gears to the cryptocurrency market, Bitcoin has staged a notable recovery, gaining nearly five per cent. The rally is partly attributed to a weakening of selling pressure from Grayscale, a major institutional player whose actions often sway the market. Beyond Bitcoin, optimism is spreading to smaller cryptocurrencies and crypto-related stocks, with Coinbase shares rising nearly three per cent and MicroStrategy jumping nine per cent.

I see this divergence between US and Asian markets as a telling sign of regional fault lines. While the US benefits from a domestic economy that can weather some external shocks, Asia’s export-driven growth model leaves it more exposed to trade disruptions. The sharp declines in these indices suggest that investors are bracing for a worst-case scenario, higher tariffs, and a potential slowdown in global demand. If trade talks falter, the risk-off tone could deepen, with ripple effects across emerging markets.

What’s driving this resurgence? I’d argue it’s a combination of market-specific factors and broader catalysts. The Grayscale reprieve is a technical boost, but the bigger story is the anticipation surrounding “Crypto Week” in the US Congress, set for July 14 to 18.

Lawmakers are poised to debate several pivotal bills, including the Clarity Act, which aims to define rules for crypto trading and investment, and the Stablecoin Bill (also known as the Genius Act), intended to regulate dollar-backed stablecoins. There’s also the Anti-CBDC Surveillance State Act, which seeks to block government digital currencies that could encroach on privacy.

In my opinion, “Crypto Week” could be a game-changer. Clear regulations have long been the missing piece for institutional adoption of crypto. If these bills pass, they could unlock fresh capital inflows, legitimising the asset class in the eyes of traditional finance.

The recent US$5 trillion debt ceiling increase adds fuel to this fire; more liquidity in the system historically lifts risk assets like Bitcoin. I’m cautiously optimistic that these developments could spark a breakout, especially if the sideways price action we’ve seen lately is indeed a prelude to a larger move.

Elon Musk and the America Party

No market analysis would be complete without mentioning Elon Musk, whose influence continues to ripple across financial landscapes. Musk recently declared that his newly formed America Party will fully support Bitcoin, doubling down with a statement on X that “Fiat is hopeless.”

This follows a public feud with Donald Trump and the launch of his political entity, born from a poll where 80 per cent of his followers backed the idea of a centrist party. Musk’s pro-Bitcoin stance isn’t new, but tying it to a political platform amplifies its reach.

I find Musk’s move fascinating and polarising. His sway over markets, as evidenced by Tesla stock surges or Dogecoin’s pump, is undeniable, and a Bitcoin-friendly party could galvanise retail and institutional interest alike. However, the America Party’s broader impact hinges on its ability to gain traction beyond Musk’s fan base.

If it remains a niche player, its influence on crypto might be more symbolic than substantive. Still, in a market hungry for narratives, Musk’s endorsement is a tailwind that could bolster sentiment, especially alongside regulatory tailwinds from Congress.

Stay nimble! The coming weeks could bring clarity or chaos to this intricate market puzzle.

 

Source: https://e27.co/musk-markets-and-money-trade-risks-meet-crypto-rewards-20250707/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

From Wall Street to crypto miners: How global risks reshape investment strategies

From Wall Street to crypto miners: How global risks reshape investment strategies

The mixed risk sentiment observed in recent sessions reflects the market’s attempt to balance optimism from easing trade frictions with caution stemming from ongoing uncertainties. On one hand, the progress in US-China trade negotiations, as evidenced by China’s confirmation of a trade framework with the US, has provided a boost to market confidence. This development contributed to US stock markets ending higher on Friday, with the S&P 500 gaining 0.52 per cent and the Nasdaq also up by 0.52 per cent, both reaching fresh record highs.

On the other hand, President Trump’s announcement terminating trade talks between the US and Canada introduced a new layer of uncertainty, leading to a pullback in US equities from their intraday highs. This dichotomy underscores the fragile nature of the current market rally and the potential for swift shifts in sentiment in response to geopolitical events.

Adding to this complexity is the Federal Reserve’s monetary policy stance. Minneapolis Fed President Neel Kashkari, although not a voting member of the 2025 Federal Open Market Committee, anticipates two rate reductions this year. However, he cautioned that tariffs could have a delayed impact on inflation, presenting a challenge for policymakers attempting to calibrate their response.

The bond market’s reaction has been intriguing, with US Treasury yields edging higher across the curve despite the prospect of rate cuts. The 10-year US Treasury yield rose by 3.5 basis points to close at 4.277 per cent, while the 2-year yield increased by 2.9 basis points to 3.748 per cent. This counterintuitive movement suggests that investors are grappling with the implications of monetary easing, juxtaposed against potential inflationary pressures from tariffs. This tension is likely to persist in the near term.

In the currency and commodity markets, the US Dollar Index advanced by 0.26 per cent, reflecting its status as a preferred safe-haven asset amid these uncertainties. In comparison, gold prices retreated by 1.61 per cent to US$3,274.33 per troy ounce. Brent crude oil saw a marginal uptick of 0.06 per cent, settling at US$67.77 per barrel, though it experienced a significant 12 per cent decline over the week, underscoring the energy sector’s sensitivity to trade developments and economic growth prospects.

Meanwhile, Asian equity indices mainly opened higher in early trading, and US equity index futures suggest an optimistic start for US stocks, pointing to a cautiously positive outlook despite the mixed signals. In a notable contrast, the cryptocurrency market has exhibited resilience, with Bitcoin’s hashprice surging to its highest level since early February, above US$58.5 per petahash per second, driven by a 7.4 per cent drop in network difficulty, alongside Bitcoin’s price hovering around US$108,500, Ethereum breaking key resistance, and XRP nearing a critical level.

Equities: Balancing trade optimism with geopolitical risks

US stock markets have shown remarkable resilience, with the S&P 500 and Nasdaq achieving record highs despite the mixed global risk sentiment. Several factors underpin this strength. Strong corporate earnings, particularly from technology and consumer discretionary sectors, have bolstered equity valuations, providing a robust foundation for market gains.

Expectations of Federal Reserve rate cuts have further enhanced investor confidence, as lower interest rates typically reduce the cost of borrowing and support higher valuations by lowering the discount rate applied to future cash flows. Additionally, the easing of US-China trade frictions has alleviated fears of a prolonged trade war that could erode corporate profits and hinder economic growth, contributing to the bullish momentum observed on Friday.

However, the termination of US-Canada trade talks introduces a significant counterweight to this optimism. The potential for escalating tariffs or retaliatory measures could pressure corporate earnings, particularly for multinational firms that rely on cross-border supply chains. This development tempers the initial rally and serves as a reminder that trade tensions remain a potent risk factor.

Looking ahead, investors should closely monitor the upcoming earnings season, which will provide critical insights into the health of corporate America and the tangible effects of trade developments on profit margins. Progress or setbacks in trade negotiations, not only with China but also with other key partners such as Canada, will likely influence market sentiment.

For those seeking to position themselves strategically, sectors less exposed to trade volatility, such as healthcare or utilities, may offer a defensive tilt, while maintaining exposure to growth-oriented sectors like technology could capture upside potential in a favourable trade resolution scenario.

Bonds: Unpacking yield movements amid policy shifts

The US Treasury market presents a puzzling picture, with yields rising despite expectations of Fed rate cuts, a scenario that typically signals lower yields as bond prices increase. The 10-year Treasury yield is climbing to 4.277 per cent, and the two-year yield is reaching 3.748 per cent, suggesting that several underlying dynamics are at play. One plausible explanation is that the market is anticipating higher inflation due to tariffs, which could lead to increased consumer prices as import costs rise.

Higher inflation expectations naturally push yields upward, as investors demand greater compensation for the erosion of purchasing power. Another factor could be the increased supply of Treasury securities to fund the US budget deficit, exerting upward pressure on yields. While safe-haven demand for Treasuries typically tempers yield increases, the current rise suggests that inflationary concerns or other market forces are overshadowing this effect.

The yield curve, which remains relatively flat given the narrow spread between the 2-year and 10-year yields, continues to draw scrutiny. Historically, a flat or inverted yield curve has foreshadowed economic slowdowns, though the present context, marked by trade uncertainties and proactive monetary policy, may alter this interpretation. For bond investors, managing duration risk becomes paramount in this volatile yield environment.

Shorter-duration bonds could provide a buffer against interest rate fluctuations, offering stability if yields continue to rise. Additionally, Treasury Inflation-Protected Securities (TIPS) might appeal to those anticipating sustained inflationary pressures from tariffs. Exploring international bonds from countries with more predictable monetary frameworks could also diversify yield opportunities, mitigating risks tied to US-specific developments.

Currencies and commodities: Safe havens and energy volatility

The US Dollar Index’s 0.26 per cent gain, despite rate cut expectations, is striking, as lower interest rates typically weaken a currency by reducing its yield appeal. Yet, the dollar’s advance likely reflects its entrenched status as a safe haven, bolstered by geopolitical uncertainties such as trade disputes and broader global instability. The relative resilience of the US economy compared to other major economies may further underpin this strength, drawing capital flows even as growth slows.

Gold, traditionally a rival safe-haven asset, fell by 1.61 per cent to US$3,274.33 per troy ounce, suggesting that investors currently favor the liquidity and stability of the dollar over gold’s inflation-hedging properties. However, should trade tensions intensify or economic conditions worsen, gold could swiftly regain favour as a store of value.

Brent crude’s marginal 0.06 per cent rise to US$67.77 per barrel masks a deeper weekly decline of approximately 12 per cent, highlighting the energy sector’s exposure to trade-related disruptions and weakening global demand signals. As tariffs threaten to slow economic activity, oil prices face downward pressure, though geopolitical risks could introduce short-term spikes.

For currency and commodity investors, maintaining some dollar exposure offers a near-term safe-haven play; however, vigilance is warranted in case of potential weakening if rate cuts proceed. Gold remains a compelling hedge against systemic risks, making it a worthy consideration for portfolio diversification. In the energy space, selective investments in companies with robust fundamentals may outperform a broadly challenged sector, particularly if demand continues to falter.

Cryptocurrencies: Resilience amid traditional market flux

The cryptocurrency market stands out for its strength, with Bitcoin’s hash price surging above US$58.5 per petahash per second—its highest since early February—following a 7.4 per cent decline in network difficulty, the steepest since the aftermath of China’s 2021 mining ban. This adjustment, which exceeds the 7.3 per cent drop during the 2022 bear market, enhances miner profitability by reducing the computational power required to earn rewards —a boon amid prior margin compression since Q4.

Bitcoin’s price, hovering around US$108,500 and just three per cent shy of its all-time high of US$111,980 from May 22, reflects this momentum, supported by a Relative Strength Index (RSI) of 59 and a bullish MACD crossover, signalling potential for further gains toward US$120,000 if resistance is breached.

Ethereum complements this narrative, closing above its 50-day exponential moving average and key resistance at US$2,461, trading around US$2,498 with an RSI of 52 and a near-bullish MACD crossover, indicating a potential rally toward US$2,724 if support holds. XRP, nearing its critical resistance level at US$2.23, could see upward momentum with a breakout, buoyed by broader confidence in the crypto market.

These movements suggest cryptocurrencies are increasingly viewed as an alternative asset class, possibly benefiting from institutional interest and their decoupling from traditional market risks. Yet, their volatility demands caution. Diversifying across Bitcoin, Ethereum, and XRP, setting strict risk parameters, and monitoring regulatory shifts are prudent steps for investors looking to enter this space.

Synthesis and strategic outlook

The current market landscape is a delicate interplay of optimism and caution. Easing US-China trade frictions and anticipated Fed rate cuts fuel equity gains and crypto resilience; however, the collapse of US-Canada trade talks and tariff-induced inflation risks temper this enthusiasm.

Investors face a multifaceted environment where diversification and adaptability are key. Equities offer opportunities in resilient sectors, such as technology and healthcare, while balancing trade-sensitive risks. Shorter-duration bonds and TIPS can navigate yield volatility and inflation, while dollar exposure hedges near-term uncertainty, with gold as a systemic risk buffer. Cryptocurrencies, although speculative, offer diversification potential for risk-tolerant investors, provided risk management is rigorous.

Success hinges on staying attuned to trade developments, Fed actions, and sector trends, adjusting portfolios dynamically as conditions evolve. By embracing a holistic view across asset classes, investors can seize opportunities while safeguarding against the volatility inherent in this intricate global market moment.

 

Source: https://e27.co/from-wall-street-to-crypto-miners-how-global-risks-reshape-investment-strategies-20250630/

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j