Bear Market Cohesion Embraces the Financial Backers!
Written by: Zhao Ying
Source: Wall Street Watch
Cryptocurrency industry giants have gathered in Abu Dhabi, urgently seeking funding to revitalize the sluggish market. As Bitcoin lost momentum since October and the industry faced an unexpected winter, key figures such as MicroStrategy founder Michael Saylor and Binance founder Changpeng Zhao have appeared in the UAE capital, hoping to gain financial support from local deep-pocketed investors.
According to a report by the Wall Street Journal, during several meetings last week, cryptocurrency executives rushed between venues, from the Bitcoin Middle East Conference to a "whale-exclusive" beach club night banquet, and to champagne parties on super yachts, actively seeking to connect with representatives of UAE sovereign wealth funds. It is reported that representatives from UAE sovereign wealth funds, managing $330 billion in assets, were active at the venues.
The UAE's interest in cryptocurrency continues to rise. Binance received full approval from Abu Dhabi's financial regulatory authority last week to operate a global trading platform from the region. A department of the sovereign wealth fund Mubadala disclosed in November that it had doubled its Bitcoin investment, with a position valued at approximately $518 million, while also holding an additional $567 million in Bitcoin positions through ETFs.
Venture capital firm RockawayX referred to the UAE as the "New Wall Street of Digital Finance" in a presentation, as the company just announced it would be acquired by a firm supported by Abu Dhabi investors. However, industry insiders warn that obtaining UAE funding typically requires years of relationship building and local business commitments, rather than "parachuting in to take the money and leave."
Industry Giants Bet on Middle Eastern Capital
In the face of a sluggish market, cryptocurrency industry leaders are pinning their hopes on UAE investors. MicroStrategy founder Michael Saylor stated at the Bitcoin Middle East Conference that he has been promoting plans to accumulate more digital currency through various financial instruments to "hundreds of investors" in the Gulf region, including sovereign wealth funds. The company's stock price has fallen by more than half since mid-year.
Saylor's presentation depicted MicroStrategy as a space rocket powered by Bitcoin, aiming for a "trillion-dollar vision." The president of Japanese hotel operator turned Bitcoin hoarder Metaplanet stated on stage that the company is seeking to raise funds through a new preferred stock program called "MARS," with its stock price also experiencing a significant decline.
Other participants seeking opportunities include Dominari Holdings, the preferred investment bank of the Trump family, and the investment securities division of South Korea's Hanwha Group, which plans to establish Abu Dhabi as a regional hub for cryptocurrency products.
U.S. Policy Setbacks Drive Capital Outflow
The downward trend in the cryptocurrency market has caught the industry off guard. Many participants originally expected Trump's full support for the industry to accelerate adoption and yield unlimited returns. However, while the U.S. stock market remains near historical highs, Bitcoin lost momentum in October, and a series of market liquidations severely impacted traders and exchanges.
Trump's cryptocurrency legislative agenda has also faced setbacks, with some Democratic lawmakers putting the brakes on new legislation to create a regulatory framework for the digital currency market. This policy uncertainty has further driven industry capital to seek opportunities overseas.
In contrast, the UAE's interest in cryptocurrency continues to grow. Earlier this year, a UAE state-backed investment company purchased a $2 billion stake in Binance, providing significant funding support to the world's largest cryptocurrency exchange.
Abu Dhabi Builds a Crypto Financial Center
The UAE is systematically positioning itself as a global cryptocurrency hub. The Abu Dhabi government is attracting cryptocurrency startups to establish operations in the city's financial center by offering early financing, free office space, and other incentives.
Kristiina Lumeste, founder of Abu Dhabi venture capital firm Klumi Ventures, stated, "Liquidity, decision-makers, and infrastructure are all here." The firm is raising a $100 million cryptocurrency-specific fund from local investors.
During the Abu Dhabi Finance Week conference, executives from U.S. blue-chip crypto companies Coinbase and Circle engaged with Wall Street figures—including Bridgewater founder Ray Dalio and Blackstone CEO Steve Schwarzman—as well as representatives from traditional banking giants like UBS and HSBC. The Crown Prince of Abu Dhabi attended the opening ceremony, and senior executives from Mubadala and other sovereign wealth funds also participated in the event.
Localization Becomes Key to Investment
Despite the numerous opportunities, securing UAE funding is not easy. Basil Al Askari, co-founder of Abu Dhabi cryptocurrency brokerage MidChains, supported by Mubadala, pointed out that many foreign companies new to the region hope to quickly close deals and return home.
He observed that some people make "rookie mistakes," assuming he works for a major UAE investment institution simply because he appears to be Emirati and is dressed in traditional robes. Al Askari emphasized that, with few exceptions, convincing sovereign wealth funds or large family offices to invest typically requires years of relationship building and a commitment to developing business locally.
Samantha Bohbot, Chief Growth Officer of RockawayX, stated, "They are not looking for people who parachute in, take the money, and leave. You must have substantial interests and stick with it." The company has established its headquarters and a local cryptocurrency project incubation center in the UAE, subsequently announcing it would be acquired by a firm supported by Abu Dhabi investors.
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