Perhaps you have considered how to buy cryptocurrency in the UAE after hearing stories of those who have made millions from Bitcoin or those who have made 100X on their investment in an altcoin.
But it’s important to know that crypto is a very volatile market: prices can soar to the sky and crash down in just a few hours. Nevertheless, there is no denying that many people across the globe have changed their fortunes in the crypto market.
If you are in the United Arab Emirates and have wondered how you can securely invest or trade in the crypto market, then this article is for you.
We will consider the investment value of Bitcoin and altcoins and then show you how to buy cryptocurrency in the UAE.
We’ll cover:
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Is Bitcoin still a good investment in 2024?
Before outlining how to buy cryptocurrency in the UAE, it is important to begin by considering if buying it even makes good investment sense.
Since Bitcoin remains the most popular crypto, we start there.
Bitcoin’s limited supply (limited to 21 million) makes it a good store of value.
When the supply of an asset cannot be arbitrarily increased, then its price cannot be eroded through increased supply – as is the case with fiat currencies.
This means that Bitcoin’s value is only tied to its demand – which can reduce or increase depending on various factors.
Once an asset is a good store of value, then it can be embraced as an investment asset, particularly if there are reasons to believe that demand for it will increase.
Since Bitcoin is an alternative to fiat currencies, with many practical benefits including anonymity, decentralised money transfer, and fast international remittances, it makes sense to believe that demand for it can increase over time.
Acceptance of Bitcoin as a payment method has been increasing among businesses and merchants. You will even find a Bitcoin ATM in Dubai where you can purchase Bitcoin with cash or withdraw cash in exchange for Bitcoin.
Given that Bitcoin is a store of value with potential for rising demand, many have accepted it as an investment asset.
Recently, Bitcoin ETFs were approved by the US Securities and Exchange Commission, and many investment management firms have started providing them to investors and clients.
Over the years, many people have earned outsized returns from investing in Bitcoin. Long-term investors have also added it to their portfolios to improve diversification and reduce investment risk.
Because its supply is limited many have labelled Bitcoin the ‘digital gold’ since gold has been embraced as a hedge against inflation and economic uncertainties.
Though the theoretical link between Bitcoin and inflation hedge makes sense, there isn’t enough empirical data to support the correlation..
Of course, Bitcoin continues to face challenges like high volatility, regulatory uncertainties, cyber-attacks and frauds, and high energy use.
Nevertheless, its value as an investment asset cannot be denied (especially given the recent approval of Bitcoin ETFs). Consequently, UAE investors convinced that its pros outweigh its cons may consider investing in it.
But is it even legal to buy Bitcoin in Dubai (or the UAE more generally)?
According to Global Media Insights, a global news agency: “There are no prohibitions against crypto assets and they can be traded on crypto exchange platforms. UAE citizens can own cryptocurrencies, and deposit and trade them.”
Various regulations are guiding the operations of crypto companies and exchanges (trading platforms) in the UAE.
The Financial Services Regulatory Authority, which regulates the Abu Dhabi Global Markets (ADGM) issued regulatory guidelines in 2018 (updated in 2023). Dubai passed its crypto law – Virtual Assets Regulation Law – in 2022 and created a regulatory body – Virtual Assets Regulatory Authority – to handle compliance (among other issues).
The Securities and Commodities Authority, which regulates financial markets in the UAE, has also been issuing and updating guidelines since 2020.
None of these regulations deemed Bitcoin trading or the trading of altcoins illegal. These laws and guidelines aim to protect customers by regulating cryptocurrency exchanges and companies.
Since Mufti Muhammad Abu Bakar, a Sharia adviser and compliance officer at Blossom Finance in Jakarta published a paper defending Bitcoin as halal, Muslims across the globe have embraced it (and cryptos in general).
However, some scholars have disagreed pointing to its fraudulent use for money laundering, lack of a legitimate central authority, speculative nature, and lack of intrinsic value.
Other scholars have argued that cryptocurrency is halal since it provides contractual uncertainty, does not charge interest, and its volatile nature does not necessarily equate to gambling (since all assets are volatile to one degree).
In between these two sets of scholars are those who won’t say cryptocurrency is halal (given the concerns above) but won’t also deem it haram.
There is no consensus yet on this topic and individual Muslims will have to consider the relevant arguments and make their own decisions.
Before considering how to buy and sell Bitcoin in Dubai and the greater UAE, let’s consider why you should consider investing in other cryptocurrencies apart from Bitcoin.
The cryptocurrency market is bigger than Bitcoin, which is just one of many cryptocurrencies that are on the market. Cryptocurrencies apart from Bitcoin are called altcoins.
Expanding your investment into altcoins can be advantageous in a few ways.
First, most altcoins have a low market cap, which means that they have a large capacity to grow in value and provide outsized returns. This is similar to the difference between large-cap and low-cap stocks. The former are already stable and well-established with limited growth potential while the latter have a lot more room to grow.
Second, since many altcoins were developed to improve upon Bitcoin, they provide many developments that make them more valuable to certain users. Even those who are not built on improving Bitcoin provide some technological innovations (like smart contracts and decentralised finance) that are poised to have greater impacts in the future.
Third, and perhaps most importantly, altcoins also provide an opportunity to reduce your portfolio risk through diversification.
According to the Modern Portfolio Theory, a Nobel Prize-winning economic theory, a diversified portfolio of negatively correlated, zero-correlated, and/or less-positively correlated assets will reduce an investor’s overall risk. That is, investors can reduce their portfolio risk by diversifying into other assets that are negatively, zero, or less-positively correlated to the assets they currently hold.
While the correlation between Bitcoin and other cryptocurrencies (altcoins) was very high between 2016 and 2018, that correlation has been declining in recent years, according to a 2021 report by Crypto News.
A December 2023 survey by GNY.io, a crypto intelligence platform, reported by The Armchair Trader, a financial blog, revealed that 7 of the leading 11 altcoins had no relationship with Bitcoin, with many of them even showing a negative correlation.
In this situation, including other altcoins together with Bitcoin in a portfolio may reduce the risk of an investor compared to investing in only Bitcoin.
In 2021, different reasons were given for the declining correlation – the bull market, the opportunity to make massive profits in altcoins, speculation, among others. However, one reason we should not lose sight of, according to Lou Kerner, a Quantum Economics analyst, is that “some projects are scaling rapidly (e.g. Uniswap, Polkadot, Binance) creating significant value and bringing down Bitcoin’s dominance.”
Or, in the words of Joel Kruger, an analyst at LAMX, a global fintech company, “market participants are learning that many cryptocurrencies offer different value propositions. This is becoming more evident as we begin to see development in the space highlighting these differences.”
While we cannot deny the effects of a bullish market and investor speculation, it is also true that many other cryptocurrencies are showing their unique value based on their underlying technology, thereby generating interest from investors.
This is also the explanation given by GNY.io in response to the 2023 data quoted above:
“As many leading Altcoins become more established, they are becoming increasingly popular with crypto investors and traders,” according to Cosmas Wang, the CEO. “It is also clear that many are becoming less correlated with Bitcoin, which increases their level of attractiveness as it enables traders and investors to more easily diversify their portfolios.”
From the previous section, it is evident that you should focus on the technological innovation or unique selling point (USP) of an altcoin. If the altcoin has a strong USP (s) that is attractive to investors, then there is a great possibility that it will become well-established and provide both growth and risk-reducing benefits.
Note, however, that some altcoins have become popular and established based on their social media popularity and connection with celebrities rather than their intrinsic value.
While the lack of intrinsic value makes them risky, some of them are backed by a committed community of enthusiasts and developers, which makes them even less volatile than those with great technology.
Below, we consider some altcoins that you might consider in your portfolio:
(Note: This list of altcoins is in no particular order and not a purchase recommendation.)
The Graph is a decentralised blockchain protocol that helps to index and query data from blockchain networks like Ethereum and Filecoin, similar to the way Google indexes and
queries data from across the web.
GRT is the Ethereum token that powers The Graph and it is currently the 44th-largest cryptocurrency by market cap.
Tezos is a blockchain network based on smart contracts. It is like Ethereum but with improved infrastructure.
Its key USP is that it can avoid a hard fork, unlike Ethereum and Bitcoin. Also, it seeks to constantly evolve its technology to catch up with developments in the crypto space.
Launched in 2018, it is currently the 87th-largest cryptocurrency by market cap.
Polkadot was designed to improve the interoperability of blockchain networks. That is, it makes it easy for users to transfer tokens, data, and other assets between two or more blockchain networks.
The interoperability provided by Polkadot (and similar cryptos) has been key to the development of Web3 – a decentralised internet of blockchains.
It is currently the 14th-largest cryptocurrency by market cap.
Litecoin is an open-source payment network. It has a faster transaction processing time compared to Bitcoin, though it is behind it in global acceptance. The network also uses the same proof-of-work system as Bitcoin.
LTC is the native cryptocurrency of the Litecoin network and it is currently the 20th-largest cryptocurrency by market cap.
Ethereum is a decentralised blockchain that is used for the building and running of different decentralised applications. It remains the most popular network used by developers.
ETH is the native cryptocurrency of the Ethereum network that is mined to reward miners and it is the second-largest cryptocurrency by market cap.
Dogecoin is a meme coin that has taken the cryptocurrency world by storm in recent years. Though many consider it as having no specific intrinsic value, it is very popular and has a thriving community of miners and investors all over the world.
DOGE is currently the 8th-largest cryptocurrency by market cap.
If you are one of the enthusiasts of this meme coin, we will soon consider how to buy Dogecoin in the UAE.
Curve is a decentralised exchange for the purchase and sale of stablecoins (like Tether, also known as USDT).
It launched its Decentralised Autonomous Organisation (DAO), operating on the Ethereum network (with CRV as its token). This DAO allows the connection of multiple smart contracts used to manage the liquidity of deposits on the Curve exchange.
CRV is currently the 122nd-largest cryptocurrency by market cap.
Chainlink is a decentralised Oracle network that connects smart contracts on Ethereum to APIs, payment platforms, and external data sources that are outside of the Ethereum network. In essence, chainlink improves the functionality of the Ethereum platform by enhancing smart contracts.
LINK is the native cryptocurrency of the network and it is currently the 16th-largest cryptocurrency by market cap.
Bitcoin Cash is a hard fork created out of Bitcoin. It was created out of Bitcoin as a way to process transactions faster.
The creators believed that if Bitcoin was going to be a currency, a faster transaction speed was needed. They branched out with Bitcoin cash when they could not convince other Bitcoin developers and miners.
BCH is the native cryptocurrency of Bitcoin cash and it is currently the 13th-largest cryptocurrency by market cap.
BAT is the token powering a blockchain digital advertising platform that offers advertisers higher returns and rewards users for viewing ads. Users can experience this platform through the Brave Browser.
This token is currently the 168th-largest cryptocurrency by market cap.
Avalanche is one of Ethereum’s rivals. It is a blockchain that allows the creation of decentralised apps and custom blockchain networks. Its USP is having a larger transaction output – targeting 6,500 transactions per second – while maintaining scalability.
It is currently the 11th-largest cryptocurrency by market cap.
[Other notable mentions: Ripple (XRP), Algorand (ALGO), and Binance Coin (BNB)]
Though we have used the word “investing” more frequently, this does not mean that investing is the only approach to cryptocurrency.
You can decide to be a cryptocurrency investor or trader, depending on your financial goals and risk tolerance.
If making regular and consistent profits is your goal and you have the time to invest and high risk tolerance (trading is riskier since prices are more volatile in the short term), then crypto trading may be for you.
Conversely, if you are more concerned about long-term wealth-building and/or don’t have the time to invest in trading or the risk tolerance needed, investing might be the better option.
Now to the main point: how to buy cryptocurrency in the UAE.
Whether you’re a new or seasoned investor, you can start buying and selling cryptocurrencies in the UAE through the Sarwa Trade app. There is a special section on the trading app – Sarwa Crypto – specifically designed for cryptocurrencies.
Currently, you can buy Bitcoin, Avalanche, Basic Attention Token, Bitcoin Cash, Chainlink, Dogecoin, and Curve Token (as seen below)
You can also buy Ethereum, Litecoin, Polkadot, Tezos, and The Graph (as seen below).
And if you also like to invest in companies that are offering crypto and blockchain technologies, you can do so by buying crypto stocks on the Sarwa Trade app.
Sarwa Trade is not just another way to buy crypto; it provides many benefits that make it stand out. Below are some of them:
In addition, your crypto holdings are securely managed through BMO Harris, an American national bank, which is Alpaca’s custodian.
Like our regulators, we take consumer protection seriously and this is why we do everything possible to comply with every regulation.
We also have responsive customer support that will answer your questions and provide any help needed.
Sarwa Crypto is available via the Sarwa Trade app which you can download on the Google or Apple stores.
The signup process will include a KYC, which is a regulatory requirement.
Once you have signed up, you will have your crypto wallets in the UAE from where you can buy and sell your favourite cryptocurrencies.
Sarwa Trade provides 24/7 live access to the top cryptos and we are working to add even more cryptos to the app.
You can sell all available cryptocurrencies by going to the “Trade” tab and clicking on “View all” just beside the Crypto row.
Alternatively, you can create a watchlist that includes all the cryptocurrencies you are considering. Once you are ready to buy, you can go straight to your watchlist and create an order.
For each crypto, we provide you with important information like trading stats (52-week high and low, trading volume, etc.), a brief description of what it is all about, and recent news.
You can fund your account through a bank transfer (which is free), wire transfer, or through local or global (Visa, MasterCard) debit cards and credit cards.
Depositing through local cards will cost 2.99% + 1 AED per transaction and it will cost 3.99% + 1 AED per transaction for international cards.
To buy a crypto, click on it via the “Trade” or “Watchlist” tabs.
You will see a chart like the one below (as well as your current holdings, if any):
Note that the price you will see includes a 0.75% spread. For example, if a cryptocurrency is trading at a market price of $1,000, the buy price on Sarwa Trade will be $1007.5 ($1,000 + 0.75% of $1,000) and the sell price will be $992.5 ($1,000 – 0.75% of $1,000).
Like stocks, you can create a market order or a conditional order (stop order or limit order). With a market order, you will purchase the cryptocurrency at the current market price.
A limit order contains a maximum price above which you are not willing to go. Once the price is at or below that amount, the trade will be executed. A stop order contains a specific price and the trade will be executed only when the crypto trades at that specific price.
Similarly, you can buy your favourite cryptos by specifying the number of coins you want (e.g., 1 DOGE or 5 AVAX) or by inputting a dollar amount (e.g., $50 worth of DOGE or $100 worth of ETH).
We don’t support trading pairs on Sarwa Trade (e.g., buying ETH with BTC). You have to buy every crypto with USD and not with another crypto. All sales will also be converted into USD, which will be available on your e-wallet.
Note also that you can only buy cryptos into your crypto wallets through fiat deposits and withdrawals can only be made into your local bank accounts in the local currency (dirham).
We don’t allow the transfer of crypto between your external altcoin or Bitcoin wallets and Sarwa Trade. This is one of the ways we secure your investments and comply with regulations guiding our activities.
If you want to sell any crypto, you can also click on it through the “Watchlists” or “Trade” tab and then go on to create a sell order.
Sell orders, like buy orders, can be market or conditional orders and you can sell by dollar value or by quantity.
[Are you ready to create your portfolio of cryptocurrencies in the UAE? Sign up for Sarwa Trade for commission-free, secure, and accessible crypto trading and investing.]
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