Southeast Asia Shows Strong Interest in “Degen” Crypto Tokens

Southeast Asia Shows Strong Interest in “Degen” Crypto Tokens

by May 16, 2024

The Philippines has been uncovered to be the leading country in Southeast Asia showcasing overall interest in degen crypto and small cap cryptocurrency tokens, according to an extensive recent update from crypto resource platform CoinGecko.

The research study released by CoinGecko has reportedly examined total visits by country to GeckoTerminal, DEX Screener, and DEXTools from April 2023 to March 2024, based on Similarweb data. This attempt at comprehensive analysis helps to map out global interest and trends in small cap cryptocurrency tokens, offering valuable insights into the evolving landscape of digital assets.

For the unfamiliar, degen crypto is also known as “degenerate crypto”. The term refers to high-risk, speculative investments in small cap or low market cap cryptocurrencies, often with little or no established track record or utility.

These tokens are typically created and promoted through online communities, with the aim of generating quick profits through speculation and hype.

Small cap cryptocurrency tokens are those with a relatively low market capitalisation, usually less than US$1 billion. These tokens are often associated with newer projects or initiatives that have not yet gained widespread adoption or recognition.

While they offer the potential for significant gains if the project succeeds, they also carry a higher risk of failure or price volatility.

Leading Degen Crypto Countries

According to the research report from CoinGecko, the most degen country in crypto is the US, which “represented 16.8% of global interest in smaller market capitalisation crypto on onchain DEX trackers.” As noted, the term ‘degen crypto’ is used within the cryptocurrency community to describe highly speculative, often risky investments in cryptocurrencies, particularly those with lower market capitalisations or meme coins. These investments are characterised by their potential for high returns as well as high losses.

Besides the US, other leading crypto degen countries include the UK with 6.2% of interest in so-called ‘shitcoins’ or memecoins, followed by the Philippines with 5.1% interest. The top 25 most crypto degen countries account for a majority 77.8% of onchain speculation interest.

Besides US and UK, Southeast Asia Shows Strong Interest in Small Cap Crypto Tokens

The top 25 most crypto degen countries account for a majority 77.8% of onchain speculation interest.

Southeast Asian Interest in Small Cap Tokens

The CoinGecko report highlights that neighbouring Southeast Asian countries, including Indonesia (4.0% share), Vietnam (2.9%), Thailand (1.2%), and Malaysia (0.9%), have relatively high interest in smaller market capitalisation crypto — making it the second most represented region, after the European Union (EU), in the top 25 of degen crypto countries in 2024.

In relation to these Southeast Asian countries, the impact of degen crypto and small cap tokens has been significant, particularly in terms of attracting retail investors and fostering speculation. Several factors have contributed to this regional trend:

High Mobile and Internet Penetration: The widespread use of mobile phones and internet access in these regions facilitates easier access to cryptocurrency trading platforms in recent years, enabling more people and lowering the bar for individuals to engage in crypto investments and trading.

Accessibility and affordability: Many small cap tokens are relatively affordable, allowing individuals with limited capital to invest. This has led to a surge in retail participation, often driven by the fear of missing out (FOMO) on potential gains.

Youthful Population: The demographic in Southeast Asia is relatively young, tech-savvy, and open to new technologies, including cryptocurrencies.

While older generations in the region might look to more risk-averse investment opportunities or perhaps did not possess the digital investment knowledge base, the above demographic is far more likely to engage in high-risk, high-reward investments like small cap tokens.

Regulatory environment: Some Southeast Asian countries have been slower to implement comprehensive regulations for cryptocurrencies, creating an environment where speculative activities can thrive more easily.

On the other hand, regional regulators have been stepping up supervision and legislation in this arena, and while some have cracked down following dubious crypto-related fraud or after well-publicised implosions of crypto exchanges, others like the Monetary Authority of Singapore (MAS) and the Bangko Sentral ng Pilipinas (BSP) have actually moved to license and regulate virtual asset entities — fostering a more collaborative and secured environment for legitimate cryptocurrencies to thrive, while also ensuring a degree of investor protection.

Economic Conditions: Many Southeast Asian countries experience varying degrees of economic volatility, driving individuals to seek alternative investment opportunities that promise higher returns compared to traditional financial instruments. Cryptocurrencies, particularly small cap tokens, provide an attractive option due to their potential for rapid growth.

Remittances and Financial Inclusion: Cryptocurrencies offer a means for cheaper and faster remittances, which is crucial for countries like the Philippines with a large number of overseas workers. Additionally, they provide financial services to the unbanked population, promoting financial inclusion.

Besides US and UK, Southeast Asia Shows Strong Interest in Small Cap Crypto Tokens

Southeast Asian nations came in the 2024 list at #3, #5, #9, #19, and #24

Other Notable Countries Trading in Small Cap Tokens

Nigeria is the only African country to rank among the top 25 crypto degen countries and is the sixth most interested with a 3.9% share. Within the European Union (EU), the countries most interested in onchain trading are France (4.4% share of global interest), the Netherlands (3.0%), and Poland (2.4%). In total, six EU members ranked among the global top 25 degen countries.

Notably, 18 out of the 25 most crypto degen countries are members of the G20, which is an international forum comprising economically significant countries, the report from CoinGecko revealed.

Speculative Nature of Crypto Markets

However, the high-risk nature of degen crypto and small-cap tokens has also led to concerns about investor protection and market integrity. Many of these tokens have been associated with pump-and-dump schemes, rug pulls (where developers abandon a project and run off with investor funds), and other fraudulent activities.

In addition to speculating on which crypto tokens will yield long or short-term gains, it was recently revealed that the vast majority of stablecoin transactions are not being carried out by genuine users. As recent report cited that over 90% of transactions performed with stablecoins are being done by bots or other entities which are not real users.

While these developments suggest that the crypto markets are mostly dominated by speculative trading, the industry has come a long way in the past five years. However, progress is still needed when it comes to regulations and more guidelines from authorities that will curtail fraudulent activities, while not stifling innovation.