Author: Grapefruit, ChainCatcher
Favorable conditions created by potential population growth dividends, relatively tolerant regulatory policies and low operating costs have made Vietnam a gold mine in the eyes of people from all walks of life.
The explosive popularity of the blockchain game product Axie Infinity in 2021 has successfully attracted the attention of the Web3 industry to the Vietnamese market. There are even many opinions that Vietnam may become an important driving force for the next wave of crypto bull market, and the focus of cryptocurrency trading will slowly shift from today's South Korea and Japan to emerging Southeast Asian markets such as Vietnam and the Philippines.
In early August, the Wall Street Journal published an exclusive article on Binance China Market Operations, revealing that the Vietnamese market has been promoted to the top 5 countries in Binance trading volume. According to internal information collected by the Wall Street Journal, in May 2023, Vietnamese investors' trading volume on Binance reached about 20 billion US dollars, of which futures trading accounted for about 90%. The trading amount of Vietnamese users in Binance's overall trading volume ranked fourth among many countries.
Top 5 countries with the highest Binance spot and futures trading volumes in May 2023
In a short period of time, this news quickly became the focus of presentations by leading Vietnamese local crypto media such as Coin68 and Coin98insight, suggesting that the Vietnamese market has become a key area that cannot be ignored in the crypto industry.
Compared with the top three countries, China, South Korea, and Turkey, Vietnam has become the fourth country in terms of trading volume on Binance, which is quite curious.
We may not be unfamiliar with China, South Korea, and Turkey as hotspots for cryptocurrency trading. Among them, China ranks first in terms of the number of trading users and trading volume, as it has a large base of crypto users; South Korea is often regarded as the country with the largest number of people speculating in cryptocurrencies, as its unemployment rate and housing prices are high and class solidification is serious. Young people regard cryptocurrency investment as a hope for counterattack; Turkey has always had a high inflation rate and its national currency, the lira, has depreciated severely, forcing people to look for anti-inflation assets. Stablecoins and Bitcoin are a good choice for Turks.
Although Vietnam is still an emerging market in the crypto field, various data show that the number of Vietnamese crypto users has not lagged behind. On the contrary, it ranked first in cryptocurrency adoption in 2021 and 2022.
However, apart from Axie Infinity, there are not many reports on the Vietnamese market on the market, so users know very little about the Vietnamese market and have always regarded it as a mysterious existence.
Since Vietnam has grown into an important region that cannot be ignored in the crypto industry, it is imperative to quickly understand the layout of Web3 projects and related companies in the market. Exchanges are the first entry point for users to access the crypto world, and the trading activity of their users is often used to measure the popularity of crypto activities in the local market. So, how is the development of Vietnam's crypto trading track?
In China, there are leading exchanges such as Binance and OKX, and in South Korea, there are Upbit and Bithumb. What trading platforms are there in the Vietnamese market? What are the criteria for local users to choose exchanges? This article will systematically sort out the development status of the Vietnamese crypto market and the pattern of crypto exchanges.
The demographic dividend unleashes the growth potential of Vietnam’s crypto market, and the crypto adoption rate ranks first for two consecutive years
In 2021, the phenomenal product Axie Infinity not only created jobs and opportunities to earn a living for people in Southeast Asia, such as Vietnam and the Philippines, but also set off a new wave of Web3 entrepreneurship in the local area, giving birth to a number of Web3 projects with global influence, such as Yield Guild Games (YGG) and Ancient8.
The common point among these projects is that their founding teams are all in Vietnam. Their success has attracted the attention of the crypto industry to Vietnam, a fertile land, and has become a gold-digging holy land for the Web3 industry. A large amount of international capital and crypto professionals have begun to enter Vietnam. Some venture capital institutions have even set up special investment funds for Web3 projects created by Vietnamese teams, hoping to find the next Web3 hit product like "Axie Infinity" in Vietnam.
According to the "2022 Vietnam Cryptocurrency Market Report" released by Coin98 Insights in March this year, 7 of the top 200 blockchain companies in the world were founded by Vietnamese, including Axie Infinity, Ancient8, Yield Guild Games, Coin98, Kyber Network, etc.
As of December 2022, there are more than 200 blockchain projects in operation in Vietnam. Vietnam has more than 200 active blockchain projects covering multiple fields, including GameFi, DeFi, and NFT. Among them, games and metaverse projects account for 28.8%, DeFi accounts for 26.0%, NFT accounts for 12.4%, infrastructure accounts for 11.3%, and Web3 accounts for 5.1%.
In addition, the report also stated that Vietnam's digital asset trading volume reached US$112.6 billion between July 2021 and June 2022, higher than Singapore's US$101 billion.
In the "Global Cryptocurrency Adoption Index" report released by blockchain data company Chainalysis, Vietnam ranked first in cryptocurrency adoption for two consecutive years in 2021 and 2022. Among them, the Vietnamese market shows extremely high purchasing power and population adoption rate in centralized services, DeFi and P2P transactions. Hunter, a partner of Vietnamese crypto media BitouchNew, has a deep understanding of this. He said that you can see people carrying black plastic bags on the streets of Vietnam exchanging Vietnamese Dong (VNT) for USDT, and you can also use USDT to pay rent and some living bills.
The above data fully demonstrates the promising potential and prospects of the crypto market in Vietnam. At present, the development of the Vietnamese crypto market cannot be ignored. According to a report by MarketsandMarkets, by 2026, the value of Vietnam's blockchain-related market is expected to reach nearly US$2.5 billion, a five-fold increase from 2021.
However, for crypto companies, whether a market is profitable (such as lower costs), whether it can bring potential user growth, and whether policies support it will become important considerations in deciding whether to explore the market. In today's Vietnamese market, costs and user growth seem to meet these two expectations.
First, in terms of cost, Vietnam can provide relatively low labor costs. According to the Coin98 Insights report data, the average salary of blockchain personnel in Vietnam is relatively low compared with the world. Take HR positions as an example. The average salary of blockchain HR in Vietnam is US$30,000/year, and US$42,000/year in North America. For the most important developer position for Web3 companies, the management salary is US$2,526 per month.
Among them, at the "GM Vietnam Blockchain Week" event held in Ho Chi Minh City in July this year, the organizer Kyros Ventures released a set of data:
Assuming a 10-person Web3 startup (1 CEO, 5 engineers, 2 marketing, 1 BD and 1 designer) with an initial start-up capital of $5 million and headquartered in Vietnam, such a configuration can enable the company to operate for 18 years. The same configuration can last 8.5 years in China, only 3.4 years in Singapore, and only 2.9 years in the United States.
Secondly, Vietnam's population growth dividend can bring potential user growth to crypto companies. In April this year, Vietnam's population officially exceeded 100 million, becoming the third country in Southeast Asia with a population of over 100 million after Indonesia and the Philippines. The population structure is mostly young people, of which the 18-34-year-old population accounts for the vast majority, which perfectly matches the target audience of cryptocurrencies and provides an ideal soil for the adoption of cryptocurrencies.
In addition, Vietnam has a high penetration rate of mobile Internet, and the cost for users to learn Web3 is relatively low. As long as companies take appropriate incentives, they can attract these people and gain incremental users. According to data, there are currently more than 16.6 million cryptocurrency holders in Vietnam, accounting for one-fifth of the total population, of which 31% hold Bitcoin.
In terms of policy, the Vietnamese government currently does not have a clear regulatory legal framework for cryptocurrencies, so transactions in this type of asset remain in a gray area.
Although the State Bank of Vietnam (SBV) had explicitly banned all cryptocurrency-related transactions through the banking system as early as 2018, it did not prevent Vietnamese users from using cryptocurrencies. The Vietnamese Prime Minister also announced an initiative in July 2021, instructing the State Bank of Vietnam to study and conduct digital currency pilots, and stated that cryptocurrency and blockchain are technologies that Vietnam hopes to develop and master, which will help build a digital government.
In addition, as the application and demand of cryptocurrencies in Vietnam are increasing, the Vietnamese government has also begun to realize the potential and importance of cryptocurrencies and is exploring how to regulate and manage the cryptocurrency market. In July last year, Vietnamese Prime Minister Pham Minh Chinh called on the Vietnamese government to study cryptocurrency regulation and add virtual currency amendments to the anti-money laundering bill, but the relevant legislation has been delayed.
As for the implementation of Vietnam's cryptocurrency regulatory policies, Hunter mentioned that the structural complexity of the Vietnamese government determines that formulating relevant encryption policies is not an easy task. It requires consultation and agreement from multiple government departments before a conclusion can be reached. In the short term, no specific encryption policies should be introduced.
It can be seen that Vietnam currently has a young, relatively low-cost workforce and is open to new technologies such as blockchain, while ambiguous regulatory policies also provide opportunities for the development of encryption-related projects.
What crypto trading platforms are there in the Vietnamese market?
Exchanges are the first entry point for users to reach the crypto world. Most of the users and liquidity funds in the crypto market are concentrated in centralized exchanges. The trading volume and user activity of the platform are often used as important indicators to measure whether a market is prosperous. Vietnam, which is considered to have the most market potential, is naturally a gold mine in the eyes of crypto trading platforms, and they have gone there to take root.
As early as 2019, Binance had already opened up the market in Vietnam. Its CEO Changpeng Zhao also spoke at the 2020 Binance Vietnam Blockchain Week and said, "Since 2018, Vietnam has been one of our most active markets for users. Vietnamese users have shown great enthusiasm for blockchain-based financing and transactions. Vietnam is likely to become the next global blockchain innovation center." In 2022, Changpeng Zhao appeared in Vietnam again and attended the Vietnam NFT Summit held in Hanoi, and signed a strategic event relationship with the Vietnam Blockchain Association (VBA).
At the same time, well-known exchanges such as OKX, Huobi, and Bithumb also announced the opening of Vietnamese sites and entered the Vietnamese market. Recently, there are still exchanges that have laid out in this market. In June this year, the crypto trading platform Blofin announced that it would launch a new Vietnamese page for the trading platform service in the Vietnamese market.
So, what trading platforms are there for users to choose from in Vietnam? What are the differences in products for Vietnamese users on these platforms, and what special benefits do they provide for users?
1. Early deployment of mainstream international exchanges in Vietnam
Binance’s C2C supports buying and selling crypto assets with credit cards in Vietnamese Dong (VND)
Binance's C2C business launched the Vietnamese Dong (VND) buying and selling function as early as 2020, and supports users to use Visa and other credit cards to directly use VND to buy and sell BTC, USDT, ETH, BNB, BUSD and other currencies.
According to its official Vietnamese page, Binance has listed more than 350 cryptocurrencies and transaction fees are as low as 0.1%.
In 2022, Binance announced a strategic partnership with the Vietnam Blockchain Association (VBA). The two parties will jointly explore the research and application of blockchain technology and train relevant talents for Vietnam.
OKX supports Vietnamese users to trade with VND
Compared to Binance, OKX entered the Vietnamese market earlier. In 2018, its fiat currency trading area launched Vietnamese Dong (VND) trading services, supported Vietnamese users to issue VND trading orders, and launched a Vietnamese version of the contract trading product.
MEXC is famous for its wide variety of assets in Vietnam
For MEXC users, the main reason why they choose to use MEXC among many exchanges is that MEXC has rich assets and various innovative projects can almost find trading pairs on MEXC. It is reported that MEXC currently supports more than 1,500 crypto assets for trading. MEXC supported the Vietnamese version in August 2019.
Bybit Vietnam market trading volume tripled in 2022
According to Bybit's "Bybit Next Level 2022" performance report released in September 2022, its total trading volume in the Vietnamese market has tripled (109%).
According to an interview with its founder Ben, Bybit has begun to focus on the Southeast Asian market in 2020.
What makes Bybit different is that it has no KYC requirements for cryptocurrency trading, allowing investors to start trading with just an email and password. This aspect makes Bybit an attractive option for Vietnamese investors. In addition, the platform provides users with access to and from Vietnamese Dong fiat currency, zero fees for spot market trading in the short term, and a dedicated customer service team to handle inquiries from Vietnamese customers.
Huobi has been quietly cultivating the Vietnamese market
At the same time as OKX, Huobi's OTC trading area began to support Vietnamese Dong coin trading, and launched the Vietnamese language for the contract side in 2019. According to industry insiders, Vietnam was Huobi's key overseas market in 2022, and it provided a series of preferential policies to Vietnamese partners, such as generous rebate ratios, etc., which attracted many professional traders with financial strength in Vietnam to settle in the platform. However, since October 2022, after Huobi was acquired by a fund under Hong Kong Baiyu Capital, the business of the Vietnam station has been temporarily shelved.
According to statistics from the Statista analysis platform, Huobi's market share briefly surpassed Binance at a certain time in 2022.
BingX has established a firm foothold in Vietnam by cooperating with KOLs in the Vietnamese community
Derivatives trading platform BingX, formerly known as "BingBon Popsicle", was renamed in November 2021. It quickly gained a foothold in the Vietnamese market by cooperating with local community KOLs in Vietnam and has set up offices in Vietnam. According to its 2022 year-end report, it has added more than 200 positions in its global offices in Germany, Turkey, South Korea, Vietnam and other regions.
2. Most local trading platforms in Vietnam are OTC
Remitano, a peer-to-peer trading platform
Remitano is a Vietnamese peer-to-peer cryptocurrency trading platform established in 2014. It supports users to purchase BTC, USDT, ETH, BNB and other assets in a peer-to-peer manner. Since the entry of other exchanges such as Binance, the platform has become an important land acquisition for Vietnam to participate in cryptocurrency trading and the main source of Vietnamese OG players. However, due to the P2P trading model, each transaction must wait for confirmation from both parties before it can be completed, which is inefficient and has been taken over by overseas exchanges.
Vietnam OTC Trading Platform BitcoinVN
BitcoinVN is the largest cryptocurrency OTC trading platform in Vietnam. The platform supports currency-to-currency and fiat currency transactions, including multiple fiat currency channels including the Vietnamese Dong.
In summary, there are only a handful of localized exchanges in Vietnam, most of which are OTC platforms.
Vietnam’s crypto trading landscape: dominated by overseas platforms, users prefer large exchanges with high security
"The Vietnamese crypto market lacks mature local trading platforms, and is dominated by foreign brands, and local investors also choose the latter." This is basically a consensus among industry insiders who are familiar with the Vietnamese market. Nowadays, many crypto trading platforms have opened Vietnamese services. What is the current situation of the Vietnamese exchange track? What are the criteria for local Vietnamese investors to select exchanges?
In fact, the Vietnamese crypto market also follows the 80/20 rule. The top trading platforms occupy about 80% of the market share, and the remaining platforms share the remaining 20%.
The criteria for Vietnamese users to select exchanges are not much different from those in China. In this regard, Mumu (pseudonym), a Vietnamese local working in the crypto industry, said that asset security and platform reliability are the first principles for Vietnamese users to choose trading platforms. The second is whether the website page is friendly to Vietnamese users (such as supporting Vietnamese, using Vietnamese Dong or local banks for deposits and withdrawals), and the depth of asset flow on the platform. In addition, they will also consider whether the platform's customer service is timely or professional, transaction fees, and whether the types of assets supported are rich.
In addition, she added that in fact, the thinking of many Vietnamese people is very similar to that of Chinese people. Chinese users choose trading platforms in the same way as Vietnamese users. Therefore, when choosing an exchange, Vietnamese users also give priority to the industry's leading platforms that support Vietnam.
At present, most of the popular crypto platforms in the Vietnamese market are platforms previously used by domestic users, such as Binance, Bybit, MEXC, etc.
According to the statistics of SimilarWeb on the website traffic share of 5 trading platforms, in the past year, Binance's official website search traffic accounted for about 70% of the website search traffic in the entire Vietnamese market, followed by Remitano with about 10%, and then MEXC, OKX, Bybit, etc.
Vietnamese crypto OG user Tam was not surprised by this statistic. He explained that based on his personal experience and the data he had, this market share was basically consistent with his prediction. In Vietnam, Binance has the largest market share, followed by Bybit, OKX, MEXC and local Remitano and other platforms.
The reason for such a prediction, he said, is that first of all, Binance is the current leader of trading platforms, with relatively reliable security, supports many types of crypto assets and is a comprehensive exchange (supports spot and contracts), and is also very friendly to Vietnamese users (has a Vietnamese page, and supports the use of Vietnamese credit and bank cards). Most Vietnamese users will choose Binance. Remitano has many Vietnamese OG users using it, Bybit's futures and other derivatives are very good and the transaction fees are relatively low, OKX has an early layout in Vietnam, and MEXC supports many types of assets. Of course, there are also some players who use other less famous platforms or try some new platforms, but this is not mainstream in Vietnam. At present, most of the well-known and recognized platforms in Vietnam are the top platforms in the global crypto trading track, and some platforms that have entered the Vietnamese market for some time and can provide their own advantages.
It can be seen that the competition landscape in Vietnam's cryptocurrency trading market has entered a white-hot stage. Currently, it is mainly dominated by overseas leading platforms. If new trading platforms do not have some strategies or unique advantages, it will be difficult to break through in a short period of time.
Entering Vietnam is still a good opportunity, and the operation strategy needs to be adapted to local conditions
Although the current competition in Vietnam’s cryptocurrency trading market seems to be quite sufficient, for a market with a population growth dividend, it is still a good opportunity for both exchanges and other Web3 projects to enter the Vietnamese market.
Tina, who has studied the Vietnamese market, agrees with this view. He said that many Web3 companies are now focusing on the Vietnamese market, which is particularly evident this year. At the GM Vietnam Blockchain Week event held by Coin98 and Kyros Ventures in July, you can see booths of many well-known global projects such as Polygon, Aptos, Coinbase, Chainlink, Avalanche, etc., and meet crypto professionals from various countries. The conference is very international.
This is very different from the Korean blockchain I participated in before. In the several Korean events I participated in this year, most of the people on site were Koreans, and it was rare to see people from abroad. In the several conferences held in Vietnam this year, the participants were very international, and the content of the talks was also very close to the forefront of the industry, such as BRC20 in the past few months. Even the initiators behind some projects are Vietnamese or Vietnamese communities. Earlier in the same month, the Vietnam Blockchain Association and Spores Network announced a partnership to launch the Web3 accelerator program SwitchUp, with more than 50 funds and international organizations investing to support Web3 startup projects in Vietnam.
He also said that the developers he met in Vietnam generally speak very good English, which is a very labor-saving place for projects that want to be deployed globally. There are also many Vietnamese universities that have set up projects and training courses to cooperate with blockchain companies, which can provide them with high-quality Web3 talents. In addition, Vietnamese users are willing to spend money and time to learn about the knowledge of the encryption industry. Many Vietnamese friends he met are willing to spend tens of thousands of yuan to participate in blockchain-related training courses after work, learn how to speculate in coins and related development knowledge, etc.
However, if Web3 projects want to achieve success in the Vietnamese market, they still need to formulate some operational strategies that are in line with local user habits.
Tina explained that, taking social channels as an example, users in Vietnam prefer FaceBook to Twitter and Youtube, so Web3 companies entering Vietnam should prioritize FaceBook. In addition, some crypto communities in Vietnam have strong appeal, such as BingX, which quickly gained a foothold in the Vietnamese market by cooperating with the community.
He also added that Vietnamese crypto users do not invest much, with an average of 100 U per person. From the disclosed Binance data, it can be seen that Vietnamese users prefer high-risk futures and are more speculative. Enterprises cannot ignore their services just because users invest little. This is mainly because most of the crypto users who participate in the investment are young people who have just started working and have low incomes at the moment, so the investment amount is relatively low, but this also means that as their wages increase, the amount of investment will also increase in the future.
Of course, this does not mean that entering the Vietnamese market is all good. The biggest uncertainty at present comes from government regulation. Since there is no clear and specific regulatory framework at present, the Web3 project is in a wild development stage. Once the regulatory policy is actually introduced, it will inevitably have an impact on some companies.
However, there is also a view that when regulation is actually introduced, it may have an adverse impact on the Web3 industry in the short term, but in the long run, clear regulation may encourage wider adoption, more complete policies, or lay the foundation for retail and institutional participation and provide greater protection for investors.
