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This Week at a Glance…

i) Bitcoin briefly tops a 2-year high of $49,000 before losing steam.

The US SEC gave the greenlight on Bitcoin spot ETFs, resulting in a trading frenzy that turned euphoria into a “sell the news” rout.

ii) The Malaysian market improves on foreign buying interest.

Led by major banking stocks, the FBMKLCI is up 2.21% since the start of the year as foreign investors continued to be net buyers for the fourth consecutive week.

iii) Passports may no longer be required for Malaysians and Singaporeans to travel to each other’s countries.

Witnessed by PM Anwar and PM Lee, both countries have signed an MoU to set up a special economic zone in Johor to strengthen ties and discuss new initiatives.

Scroll down to read the full details.

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Bitcoin mania ensues as US SEC approves Bitcoin spot ETFs

On Thursday, the US Securities and Exchange Commission (SEC) legalized spot Bitcoin Exchange Traded Funds (ETFs), resulting in a market frenzy that briefly pushed Bitcoin to a 2-year high of $49,000.

The SEC gave the greenlight for 11 ETFs to list in the stock market.

Major financial institutions such as BlackRock, Fidelity and Grayscale have scrambled to hook in new investors with their ETFs, going as far as slashing fees and providing enticing promotions.

The first funds will enjoy special tax treatment in the US and have begun trading on Thursday morning.

Why is this such a big event?

A bitcoin spot ETF will trade like a regular ETF on stock exchanges.

Unlike futures ETFs that rely on the forward price of Bitcoin, spot ETFs directly track the price of Bitcoin, offering investors exposure without owning the asset directly.

This type of ETF has been discussed for over a decade, with applications from BlackRock and Fidelity indicating a growing interest with institutions.

The SEC’s approval comes after months of anticipation and a bitter legal battle.

Hours before the announcement, Chairman Gary Gensler claimed that hackers briefly seized control of the SEC’s Twitter account, falsely publishing news that spot ETFs have been approved.

This led to sharp swings in Bitcoin’s price, which eventually skyrocketed when the SEC officially released its approval.

Though Bitcoin has since retraced, experts believe that it still has more upside to go, as the ETF approval will only increase adoption and demand.

How can I position myself in a volatile asset like Bitcoin?

Rather than timing the market, it’s better to fix a percentage that you want to allocate in BTC.

Portfolio managers don’t recommend an exposure of more than 15% in Bitcoin.

If you’re a low-risk investor, a 1-3% allocation should be good enough. This means that, with a portfolio of RM100,000, you can allocate up to RM3,000 in Bitcoin.

High-risk investors can go up to the high single digits, but never get greedy or go overboard.

Naturally, if Bitcoin underperforms in the next few months, the weightage will reduce in your portfolio, which is a good signal for you to allocate more, thus enabling you to "buy the dip" in a sense.

But when is the right time to take profits?

I posted this question previously to the founder of RinggitPlus, Hann Liew, and here’s his response:

The second method is most commonly used.

You start off by fixing a specific percentage for each asset (ie. stocks, bonds, crypto, gold, etc.) within your portfolio and determine a deviation in which they can fluctuate.

Say your plan is to have 60% stocks, 30% bonds, and 10% crypto with a 5% acceptable deviation in each asset.

In this scenario, when crypto rallies and your holdings exceed 15%, it is a clear signal for you to rebalance your portfolio back to the 60/30/10 ratio.

You can do this by selling crypto or funneling your monthly DCA amount into the other two assets, prioritizing whichever that has a lower dominance.

This method removes the need for speculation and timing the market, since you’ll be investing based on your own risk preference.

Foreign investors continue to invest in Bursa Malaysia

Bitcoin is not the only asset that has had a good start to the new year.

The FBMKLCI is up 2.21% in the past two weeks, spurred by inflows from foreign institutions.

For the 4th consecutive week, foreign investors have remained as buyers on Bursa Malaysia with a total net inflow of RM524.9 million last week.

According to MIDF, sectors that recorded the highest net foreign inflows were Utilities (RM208.9m), Financial Services (RM156.0m), and Property (RM126.9m).

The top four companies in Malaysia are all up by a significant margin.

Maybank rallied 2.05% from RM8.89 to RM9.07 since the new year.

Public Bank jumped 1.69% to RM4.34.

CIMB surged 3.31% to a 5-year high of RM6.03.

TENAGA broke free of its RM10.00 resistance and rose to RM10.50.

If you’re interested to invest in MY stocks but are unsure where or how to, try out Rakuten Trade.

The trading platform also offers US and HK stocks, including ETFs that track the S&P (VOO, VTI, and QQQ).

I’ve been using it for over 4 months now, and the experience has been quite a blast.

Though the fees may not be the lowest, Rakuten remains my top option for now due to its wide range of products and simplicity of access.

I’m working on a full review of this platform, so stay tuned!

Malaysians & Singaporeans may no longer require passports to travel to each other’s countries!

Rafizi Ramli and Singapore’s Minister of Trade and Industry Gan Kim Yong signed a Memorandum of Understanding (MoU) on Thursday to strengthen the ties between Johor and Singapore.

Witnessed by PM Anwar and PM Lee Hsien Loong, both countries have agreed to work on a Johor-Singapore Special Economic Zone (JS-SEZ) to enhance cross-border trade.

A notable initiative that is being explored is the adoption of QR codes at land checkpoints instead of passports.

This will make it easier for M’sians and S’poreans to travel to the two nations.

Prior to the signing of the MoU, PM Anwar and PM Lee met to witness the progress of the RTS link, an international MRT system that will connect Johor and Woodlands Singapore.

Both parties signed a plaque to show their commitment to the construction, which had reached 65% completion as of 31 December and is expected to be completed by the end of 2026.

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That’s all for this week’s newsletter!

DISCLAIMER: The information contained in this newsletter is for informational and educational purposes only. Nothing herein shall be construed to be financial, legal, or tax advice.