Why everyone in Pakistan is buying crypto, but should you?

Think about the people around you who have started putting money somewhere this year. The cousin who opened a Binance account in a single evening. Now try to think of one person you know who bought a share on the Pakistan Stock Exchange this year. Out of a population of around twenty-five crore, close to two and a half crore Pakistanis are in crypto in some form, roughly ten percent of the country. Then look at the stock market, where actual companies are working and producing real value, and participation sits at nought point one percent.

Crypto and the Pakistani have a genuinely toxic relationship. Scams have sent crores of rupees out of the country. And after all of that, crypto is still our first love. Is crypto some terrible thing you should stay out of entirely? My honest answer is no. If crypto isn't the problem, though, then the problem is somewhere else, and that's the thing worth finding.

What I want to do here is walk through three things in order. Why we pick crypto over productive assets in the first place. What the world's biggest players, the US, China, Russia, are quietly doing with their own wealth while we're busy trying to flip two hundred dollars into two thousand. And then, at the end, how I'd actually build a portfolio in the middle of all this noise, because that's the only part that changes what you actually do with your money.

The stock market makes you work for it. Binance doesn't.

Friction. Open a stock market account in Pakistan and you meet friction at every step. You go to some brokerage website, you find their form, you fill the whole thing out, and then an OTP has to be generated and sent to you by the CDC, which is a government department. It might come three or four days later. And there's a seventy-two hour window to enter it, so if you miss that window, you start again from zero and wait another few days.

There's a simple rule underneath this. Whatever has friction, you don't do. Say there's a cold drink in your fridge. Now say the fridge is empty and the drink is at a shop two kilometres away. Suddenly you think, who's going to walk two kilometres, I'm fine at home.

The stock market is the shop two kilometres away. Crypto is the drink in the fridge. Pick any exchange, Binance is the obvious one, and you can open an account, clear the KYC, and be inside making your first trade in about ten minutes.

The promise of quick money, and the trap waiting behind it

Friction gets people in the door. Say you've got a lakh or two lakh to put somewhere. So you search a little, and you learn that the stock market's historic return over the last ten, fifteen, twenty years runs around fifteen or sixteen percent a year. Then you watch an influencer or someone running a crypto group, and he's saying he did two, three, five X.

Fifteen percent is twenty or thirty thousand rupees. But if that same two lakh went 10X, it becomes twenty lakh. Of course you're pulled toward the second number. The stock market isn't guaranteed, but there you have fifteen or twenty years of data saying that if you stay invested for a few years, you tend to come out with a profit.

Crypto has no such record. We've watched coins that traded at a hundred dollars fall to a single dollar. The scams sit thick in there, and the advertising, the 50X, the 100X, the 200X, is exactly what people get caught on.

And once someone is in and watching others make more, he meets the next monster, futures trading. In futures, if you have a thousand dollars, the exchange lets you open a trade worth twenty or even fifty thousand. If the coin moves up ten percent, your money might double. If it moves down ten percent, the whole thousand can go to zero.

Futures trading is close to what the market itself calls satta, a bet, and that's not my word, it's the market's own term for it. From what I understand, many credible scholars, and the fatwas I've come across, consider this haram. I'm not a scholar and I'm not issuing a ruling, I'm passing on what I've found. For now, going by everything in front of me, I stay away from it.

There's no proper structure from the government to pull an ordinary person toward the stock market instead. Think about it, if the country got great returns from just nought point one percent participation, imagine the same money at one or two and a half percent. The GDP would feel it, the conditions would improve, more people would actually profit. The problem was never that crypto exists.

Now zoom out, because you're a small player in a very big game

Leave Pakistan for a moment and stand on the global stage, because what's happening up there quietly shapes what happens to your money down here. And the US is carrying a debt of around thirty-seven trillion dollars, a debt it either has to pay back or endlessly restructure to keep the country running. It takes new debt to pay off the old debt, and stays alive turning inside that cycle.

Imagine only one hundred-dollar note existed in the whole world, and you borrowed it. Return the note, or, because you happen to be the world's currency printer, print a second hundred-dollar note. The moment two hundred-dollar notes exist where there was one, you've halved what each is worth.

Now the twist, and I'll flag it clearly as a claim, not a fact. An advisor to the Russian president said in a press conference that what the US is really doing is moving its whole thirty-seven trillion dollar debt into the crypto cloud, to make it disappear from there. When you buy any coin, you first buy it with USDT or USDC, stablecoins pegged one-to-one to the real dollar.

The companies issuing those stablecoins hold huge piles of real dollars behind them, and to keep those dollars from losing value, they park a major share in US Treasury bills. Treasury bills are simply US debt. If nearly everyone in the world is holding USDT, and behind every USDT is a dollar buying US debt, then the day the US inflates its dollars, prints more, lets their value drift down, the purchasing power of every USDT drops too. That's the claim, and it comes from a president's advisor, so it carries some weight, but keep it filed as a claim.

The fight over gold, and why it's the boring asset

That debt story runs hand in hand with another move. Michael Saylor, the man who holds the most Bitcoin of anyone, and whose company you'll see in the news buying more every time Bitcoin dips, has a proposal for the US government. Sell your gold, he says, and buy Bitcoin. But if the US ever adopted it, the market would shake, because these wars aren't being fought with guns anymore.

Which brings up the question sitting underneath all of it. While everyone is shouting crypto, crypto, why is China buying gold as fast as it can? The US still holds the most gold, but for the last few years China, Russia, the whole set of BRICS countries, have been acquiring it aggressively, and China has only sped up.

The aim, as this narrative goes, is to loosen the dollar's grip. The only thing holding it up is trust, trust that the US stays the global power and the dollar stays the reserve currency. Shake that trust and the dollar's value goes with it, and a gold-backed currency rises in its place.

And there's a technical shift feeding it that most people never hear about. For decades, on bank balance sheets, gold was treated as a tier 2 asset. After the Basel III framework, gold was reclassified as a tier 1 asset, highly liquid, sitting on those balance sheets with the same standing a dollar or a bond used to have. This is the same story that runs back to 1971, when the dollar's link to gold was cut, and it's the story of how gold could become the next big thing if everything China wants comes to pass.

So what do you actually do with all this?

Now the honest part. All of this, the US hiding its debt in crypto, China stacking gold to dethrone the dollar, is speculation. The investor protects his, China protects hers, the US protects his, and while they do it they push narratives into the market that make you feel gold is climbing, Bitcoin is about to run, this or that is the sure thing.

What we can do is know the game well enough that when we build a portfolio, it accounts for the uncertainty instead of betting the house on one guess. Your money is an engine, and you want an engine with many points of failure, so that when one part fails the engine keeps running.

With that as the frame, here's the order I build in, and notice that the thing the whole country reaches for first sits last here. First, before any of it, an emergency fund, six to twelve months of expenses. Until that exists, your quality of life is quietly compromised, because you have no floor to stand on when life turns hard.

I'd keep that money in a money market fund, which you reach through mutual funds, and the ones I mean are Shariah compliant. What it does is give you an edge against inflation, which is eating roughly ten percent of your money's value every year.

Then comes the stock market, the biggest risk asset, and even here you can play it in stages. This is a point I picked up from Furqan bhai, who explains it beautifully. A new investor doesn't trust the market yet, and the way you build that trust is to first buy dividend-paying stocks, market leaders that have already captured their space and don't have much growth left in them.

That next level of risk is growth stocks. A growth company doesn't hand you dividends. It pours its profits back into itself, into expansion, technology, new factories and plants, all aimed at getting bigger. You make money only when the share price climbs, when the ten-rupee stock becomes forty or fifty or seventy.

If you're young, say twenty or twenty-one, and you plan to keep investing a little every year and pull it out two or three decades down the line, growth stocks are where you lean, because the horizon is long enough to carry the swings. Age shapes the whole strategy, and the simplest way in is a monthly SIP, a little put in every month rather than one big bet timed perfectly.

The last two, and why they come last

Only after those two are set do we reach the two things this whole story was supposedly about, gold and Bitcoin. When you look at what the biggest asset managers in the world recommend, the BlackRocks of the world, the modern financial advisors, read their reports or watch them talk, you find a consistent shape. Bitcoin at one to two percent of the portfolio. Gold at five to ten.

These are the largest players on earth, and even they keep Bitcoin to one or two percent, because for all the size that's flooded in, it's still volatile, still full of speculation about whether it runs from a hundred and twenty thousand dollars down to fifty thousand or up to a million. And I'm doing exactly what I just described.

I took a big loss in crypto once. My wallet was hacked and all my money in it was gone. I'm telling you the small-slice rule as someone who learned the cost of ignoring it.

Look at what the two sides are actually doing. The individual, the ordinary Pakistani, skips the boring productive asset, the stock market, because it's slow and full of friction, and chases the exciting speculative one, the coin that might 10X by Friday. And the superpowers, the players who understand this game better than anyone, are running the exact opposite way. They're quietly stacking the most boring, real, productive asset there is, gold, and repositioning their productive wealth for the decades ahead. We ended up on the wrong side of the same instinct.

I spend two or three hours a day just reading what the world is doing, and I'm passing on what I find, and where I'm wrong I'll say so. Get the order right, keep the speculation small and last, and let the boring, productive floor carry the weight. That's the part that was in your hands the whole time.