HANOI: As a first-year computer science student, Hoang Le started trading crypto from his university dorm room. His digital holdings once swelled to US$200,000, around 50 times the average annual income in Vietnam.
They crashed to zero when the bottom fell out of bitcoin and other cryptocurrencies in recent months. Getting wiped out “hurt a lot”, he told AFP, but he also learned a valuable lesson.
“When profits were high, everyone became greedy,” said Le, now 23, adding that “it was too good to be true”. He has come to think of the losses as “tuition fees”.
Unlike neighbouring China which has banned cryptocurrencies outright, communist Vietnam allowed blockchain technology to develop in a legal grey area. It barred crypto’s use for payments but let people speculate unimpeded.
As a result the young country of 100 million has been at the forefront of crypto adoption. An estimated 17 million people own digital assets, according to a 2025 ranking by consultancy Chainalysis.
Only India, the United States and Pakistan have seen more widespread usage. But what once looked like first-mover advantage increasingly looks like a liability as investors stare down a crypto winter.
The price of bitcoin has almost halved since hitting a record high above USD 126,000 in October. Other digital tokens have slid even further.
Vietnamese crypto startups hawking everything from NFTs to blockchain-based lending have been hammered. Bankruptcies and layoffs are now roiling the industry.
“Many companies have shut down because of this crisis,” said Tran Xuan Tien, head of Ho Chi Minh City’s blockchain association. He added that others are “downsizing and conserving capital to extend their runway”.
Nguyen The Vinh, co-founder of blockchain firm Ninety Eight, told AFP his company has laid off nearly one-third of its staff since last year. There was more “restructuring” to come, he added, given the gloomy outlook.
“The market will likely remain difficult for years, not just months, so we need backup plans,” Vinh said.
Until recently, Vietnam’s crypto scene was a wild west. Highly speculative ventures and outright Ponzi schemes flourished alongside startups offering legitimate products.
The government warned about the dangers of crypto and broke up several huge scam operations. One allegedly swindled nearly US$400 million from thousands of investors.
But it did not move to crush the industry as Beijing did. Instead, it opened “a window for domestic businesses to experiment”, according to Tien.
Under top leader To Lam, who has pursued sweeping growth-oriented reforms, Vietnam has formally embraced the blockchain industry. It is gradually asserting control over the estimated US$100 billion market.
Last year it passed a law recognising digital currencies, bringing them under a regulatory framework for the first time. It came into effect last month but investors have questions about how it will be implemented.
Hanoi has also announced a five-year crypto trading pilot programme. This will allow Vietnamese firms to issue digital assets.
But lingering regulatory ambiguity has kept many firms based in the country from formally registering there. Many opt instead to file paperwork in places such as Singapore and Dubai.
Vinh says some firms are folding and others downsizing or pivoting. He attributes this to both the “prolonged downturn and an unclear legal framework”.
New entities are struggling to gain traction as investor sentiment sours. Huu, 24, said fundraising for his crypto-product startup has suddenly become much harder.
He asked that only his first name be used for fear of hurting his business. Foreign investors were once enticed by promises of 400 and 500% returns, he said.
They were now discovering they “might lose everything”. “Over the past few months, things have gone downhill badly,” Huu added.
Founders including Huu and Vinh said the current downturn is part of a natural business cycle. They believe stronger firms would eventually emerge offering better products.
But that is cold comfort for the nearly 55% of individual Vietnamese crypto investors who reported losses last year. “In Vietnam, a lot of people trade crypto,” Huu said.
“When prices fall, people complain about losses and the overall mood becomes very gloomy.”
