This article first appeared in Wealth, The Edge Malaysia Weekly on December 30, 2024 - January 12, 2025

It is not an exaggeration to say that Luno, the first and largest digital asset exchange (DAX), has played an instrumental role in the development of the local cryptocurrency scene. Over the five years since it was granted a licence by the regulator, the firm has continued to command a market share of more than 90% in Malaysia, according to its Asia-Pacific general manager Aaron Tang. The firm’s business represents almost the entire licensed digital asset industry in Malaysia.

With new players entering the industry, Luno did not rest on its laurels in 2024. It launched several products to further propagate digital asset investments.

Digital assets, mainly Bitcoin and Ether, have gained much traction globally, partly reflected in the offerings of Bitcoin and Ether exchange-traded funds (ETFs) listed on the US and Hong Kong stock exchanges. While this has not happened in Malaysia, Luno introduced the Luno Bundles in November this year.

The first bundle uses investors’ money to buy digital assets that are listed on the CoinDesk Large Cap Select Index, which is designed to represent the performance of the overall cryptocurrency market by including five to 10 of the top-performing cryptocurrencies by market capitalisation.

During an event hosted by Luno at its office in 1 Power House in Petaling Jaya on Dec 5, Tang said Luno Bundles was launched for investors who are unsure about how they should trade the 18 digital assets listed on the exchange.

He added that Luno users can expect the launch of more bundles that track the performance of different indices. “Yes, we want to offer more bundles. We are very excited about the product and are working with partners to distribute it to as many people as possible.”

Luno Bundles works in a similar manner to ETFs as both track the performance of an index. The key difference is that the former is broken down into units that can be publicly traded by investors via stock exchanges.

Tang clarified during the event that Luno is not an investment manager as it does not decide on which digital assets to buy or sell, and does not own the index.

Would Luno be looking at expanding its capacity to become a digital asset investment manager? Scarlet Chai, country manager for Luno Malaysia, said during the same event that the firm does not have such a plan at the moment, but it is not out of the question.

“We have been in the market for five years operating as a spot trading exchange. And you can see us continuously expanding our offerings, such as Bundles, staking and more. We are exploring the right partners and licences. But all of this requires a lot of engagement with the Securities Commission Malaysia (SC). This is definitely in [discussion], and we are still exploring the space,” she said.

Meanwhile, Luno announced that it has garnered over one million customers and recorded a 32% growth in cumulative transaction volume from last year, bringing it to over RM87 billion.

The firm also processed more than 72 million transactions in total with accumulated assets under custody — for both digital assets and ringgit — of RM4.28 billion, which is more than double from last year.

The most popular cryptocurrencies traded through Luno are Bitcoin (BTC), Ripple (XRP), Solana (SOL) and Ethereum (ETH). Its average investor age is 34.8 and median deposit is RM100.

In terms of gender, 76% are male while the rest are female. Chai observed a 17% increase in female customers this year as compared with a 14% increase in male customers.

Most of Luno’s customers work in the manufacturing, construction, engineering and education sectors.

Tang and Chai believe that the retail market of the digital asset industry isn’t saturated. To expand its reach though, it launched Luno Institutional to tap into the institutional market.

According to its presentation slides, Luno Institutional features advanced exchange services, account setup, tailored solutions, advanced application programming interface (API), deep liquidity, staking, secure custody solution and other exclusive features.

Halfway through the event, several journalists received notification on their phones from investment apps that the Bitcoin price had broken past the US$100,000 mark for the first time since its birth in 2008.

Asked about the outlook on digital assets in 2025, Tang said he remains optimistic on the back of Donald Trump’s return to the White House. The newly elected US president is widely known for his supportive stance on digital assets and cryptocurrency.

“If you look at the past couple of years, the US hasn’t been that supportive of the digital asset industry. Some went to the extent to say that the US is anti-crypto. Now, the Trump advisory team has openly said that they want to develop the crypto industry.

“From that, we can sort of extrapolate that other countries and financial institutions will follow in the footsteps of the US. And that the shift of crypto getting more mainstream is actually happening,” said Tang.

“So, while I can’t comment on the price target, I’m optimistic about the industry, looking at [how] things [are] unfolding. If you look at the macro level as well, more countries are interested in holding Bitcoin and more companies are holding it. We are very bullish next year onwards.”

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