The first half of 2025 has revealed a surprising winner in the world of investment: the New Taiwan Dollar (TWD). While global investors continue to monitor volatile digital assets like Ethereum (ETH) and Bitcoin (BTC), a quiet but powerful trend has emerged — holding cash in TWD has delivered stronger returns than many high-risk financial instruments.
Amid ongoing fluctuations in global financial markets, the TWD has appreciated significantly against the U.S. dollar, rising from 32.796 at the beginning of the year to 29.09 by June 27 — a robust 11.3% appreciation. This sharp move has reshaped investment outcomes for Taiwanese investors, especially those exposed to dollar-denominated assets like cryptocurrencies.
Ethereum Struggles While TWD Shines
Ethereum (ETH), one of the most prominent altcoins, has faced a challenging year. Starting 2025 at $3,353, ETH dropped as low as $1,472 before recovering slightly to $2,401 by mid-year — representing a 28% decline in value. For investors betting on blockchain innovation and decentralized applications, this downturn has been difficult to stomach.
In contrast, simply holding New Taiwan Dollars would have yielded better results than investing in ETH over the same period. The strength of the TWD didn’t just outpace ETH — it fundamentally altered how other assets performed when measured in local currency terms.
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Bitcoin’s Dollar Gains Wiped Out by TWD Appreciation
Bitcoin (BTC), often seen as a safe haven within the crypto space, posted a positive performance in dollar terms. It began the year at $94,419, dipped to $76,271, and rebounded to $106,545 by June 27 — an increase of 12.8%.
However, for Taiwanese investors, this headline-grabbing rise tells only part of the story.
Due to the TWD’s 11.3% appreciation against the USD, the local-currency return on Bitcoin was nearly erased. Consider this:
- At the start of 2025, 1 BTC cost approximately NT$3,090,000 (94,419 × 32.796).
- By June 27, despite BTC reaching $106,545, the exchange rate had dropped to 29.09.
- Selling 1 BTC then would yield only NT$3,100,414 (106,545 × 29.09).
That translates to a mere NT$10,414 profit, or a 0.13% return over six months — effectively flat after accounting for transaction costs and opportunity cost.
This illustrates a crucial but often overlooked principle in international investing: your returns depend not just on asset performance, but also on currency movements.
Why Currency Risk Matters More Than You Think
Cryptocurrencies like Bitcoin and Ethereum are priced in U.S. dollars. When your home currency strengthens against the dollar, your purchasing power increases — but your returns from dollar-based assets decrease when converted back.
For Asian investors — particularly those in Taiwan, Japan, or South Korea — currency exposure is a silent performance killer. Even if Bitcoin surges 20% in USD terms, a 15% appreciation in your local currency can cut your real return in half or eliminate it entirely.
This dynamic is not new, but it’s become especially pronounced in 2025 due to:
- Weaker-than-expected U.S. economic data
- Divergence in monetary policy between the Federal Reserve and central banks in Asia
- Increased demand for Asian currencies as safe-haven flows shift
👉 Learn how global currency trends are rewriting the rules of crypto investing.
Key Investment Implications
1. Don’t Ignore FX When Evaluating Returns
Always calculate investment performance in your base currency. A 10% gain in USD might be a 2% loss in TWD if exchange rates move against you.
2. Consider Hedging Strategies
Institutional investors often hedge foreign exchange risk using forwards or options. Retail investors can explore similar tools through certain brokers or platforms that offer FX protection.
3. Hold Some Assets in Local Currency
As this year shows, sometimes cash isn't dead — it's winning. Holding a portion of your portfolio in strong local currency can act as a natural hedge and provide stability during global volatility.
4. Diversify Across Currencies
Instead of keeping all investments in USD-denominated assets, consider exposure to multiple currencies — including emerging market currencies with strong fundamentals or commodity-linked economies.
Frequently Asked Questions (FAQ)
Q: Can the New Taiwan Dollar keep appreciating?
While past performance doesn’t guarantee future results, continued trade surpluses, strong foreign reserves, and stable monetary policy support the TWD’s strength. However, rapid appreciation may prompt intervention from the Central Bank of Taiwan to maintain export competitiveness.
Q: Should I sell my crypto because of currency risk?
Not necessarily. Currency risk is just one factor. If you believe in the long-term value of digital assets, short-term FX swings shouldn’t dictate your strategy. Instead, consider adjusting allocation size or using hedging tools.
Q: Is holding cash in TWD a good long-term strategy?
Cash preserves capital but doesn’t generate yield or beat inflation over time. While TWD has outperformed crypto so far in 2025, relying solely on currency appreciation isn’t sustainable. A balanced portfolio remains key.
Q: How do I track real returns on crypto investments?
Use a simple formula:
(Selling Value in TWD – Buying Cost in TWD) / Buying Cost in TWD × 100%
This gives you the true return after both price movement and exchange rate changes.
Q: Are stablecoins a solution to FX risk?
Stablecoins like USDT or USDC preserve USD value but don’t solve the core issue — they’re still tied to the dollar. If TWD strengthens, converting stablecoins to TWD will still result in lower returns.
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Final Thoughts: Rethinking What “Winning” Means
The first half of 2025 has delivered a powerful lesson: sometimes the safest move is also the most profitable. While headlines focus on crypto rallies and market swings, the quiet strength of the New Taiwan Dollar has outperformed even some major digital assets.
For investors, this underscores the importance of looking beyond asset prices alone. Currency effects, hedging strategies, and local economic fundamentals play critical roles in determining real-world returns.
Whether you're investing in Bitcoin, Ethereum, or global equities, always ask: What am I really exposed to? The answer might surprise you.
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