#CryptoRegulation

The multipolar world and the asset allocation challenge!

The strategic confrontation between the US – China – Russia is reshaping the global financial map. Tensions among the three powers are no longer just traditional geopolitical conflicts but are deeply permeating the financial, technological, trade, and monetary systems. From the US – China technology war (Huawei, ASML, TikTok) to the prolonged military conflict in Ukraine, polarization is driving global investors to restructure portfolios, avoid political risks, and seek safe havens. The game is no longer about high profits but about maintaining asset value amidst geopolitical tremors.

Capital is fleeing China at an alarming rate, as investor confidence wavers due to instability and control policies. According to a report by the Institute of International Finance (IIF), in the fourth quarter of 2024 alone, China witnessed a net capital outflow of approximately 81 billion USD, the highest level since 2015 – when Beijing devalued the yuan. Contributing factors include weakening growth, a collapsing real estate market (with the Evergrande and Country Garden defaults), and a lack of transparency in the legal environment for foreign investors. Western finance has even dubbed this phenomenon the "China exit wave." Large investment funds such as BlackRock and Fidelity have reduced their exposure to Chinese assets since late 2022, shifting towards more stable economies in Asia such as India, Vietnam, and Indonesia.

Russia has been excluded from the Western financial system, creating a polarizing effect and increasing the demand for “sanction-proof” asset storage.