Hong Kong Stock Exchange enters the market with a high profile, and the native exchange is in crisis
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The Hong Kong Stock Exchange announced the acquisition of the London Stock Exchange in a high-profile manner and entered into digital asset trading. Although the acquisition was frustrated, the Hong Kong Stock Exchange’s blockchain ambitions have been revealed. Where does the original exchange go?
Summary
Summary
Topic: Hong Kong Stock Exchange entered the market with high profile, and the native exchange is in crisis. The Hong Kong Stock Exchange announced the acquisition of the London Stock Exchange in a high-profile manner and entered into digital asset trading. The London Stock Exchange rejected the acquisition proposal, and the Hong Kong Stock Exchange announced that it would not abandon the merger. As early as March 2018, the Hong Kong Stock Exchange started blockchain cooperation with the ASX. In February 2019, the Hong Kong Stock Exchange released the "Strategic Plan 2019-2021", which mentioned blockchain many times. In the past two years, Hong Kong’s digital asset supervision has gradually become clear, and the Hong Kong Stock Exchange has continued to accelerate the layout of blockchain and digital asset transactions. Although the acquisition of the London Stock Exchange was frustrated, it fully demonstrated the blockchain ambitions of the Hong Kong Stock Exchange. The launch of digital asset trading business may not be far away. Judging from the current situation, Coinbase, as a representative of compliant digital asset exchanges, has been highly recognized by the market. According to this speculation, once the traditional securities and futures exchange enters the market, it will be a disaster for the original digital asset exchange. In addition to the Hong Kong Stock Exchange, major traditional exchanges including Nasdaq and the ASX have already begun to cut into blockchain or digital asset-related businesses. Once traditional exchanges enter the digital asset trading business on a large scale, relying on the advantages of traditional exchanges in terms of scale and experience, it will inevitably severely squeeze native exchanges.
Market: Shock upwards, a breakthrough is imminent. This week, the total market capitalization of digital tokens was US$268.38 billion, an increase of 1.0%; the average daily trading volume was US$52.15 billion, an increase of 1.4%; the average daily turnover rate was 19.4%, an increase of 0.1%. The current price of BTC is US$10,361, a decrease of 0.1%. The average daily trading volume of BTC this week is US$15.2 billion, and the average daily turnover rate is 8.2%. The current price of ETH is 181.1 US dollars, an increase of 6.6%; the average daily trading volume of ETH this week is 6.5 billion US dollars, and the average daily turnover rate is 33.7%. This week, the BTC balance on the exchange was 888,700, an increase of 9,400; the ETH balance on the exchange was 9.22 million, a decrease of 64,000. Among the BICS secondary industries, the market value of the supply chain industry and the number of certificates have dropped significantly.
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Risk warning: regulatory policy risk, market trend risk
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1 Topic: High-profile entry of Hong Kong Stock Exchange, native exchanges are in crisis
At present, although the merger proposal of the Hong Kong Stock Exchange has been rejected, the blockchain ambitions of the Hong Kong Stock Exchange have undoubtedly been revealed.
1.1 Hong Kong Stock Exchange's high-profile entry was rejected
High-profile acquisition of the London Stock Exchange to enter digital asset trading. On September 11, 2019, the Hong Kong Stock Exchange (HKEx) proposed to merge with the London Stock Exchange Group (LSE). The merger proposal will only be effective if the exchange stops its takeover of Refinitiv. According to media reports, it is mentioned in the merger and acquisition documents that digital asset transactions will be conducted, and according to the plan of the Hong Kong Stock Exchange, it will be implemented in the next two to three years.
The LSE board unanimously rejected the takeover proposal. On September 13, 2019, the London Stock Exchange issued an announcement stating that it rejected the merger. "The board of directors has fundamental problems with the key aspects of the conditional proposal: strategy, deliverability, form of consideration and value. Therefore, the board of directors unanimously rejected the conditional proposal. And given its fundamental flaws, does not see the benefit of further engagement." The specific reasons are as follows:
The Hong Kong Stock Exchange announced that it will not abandon the merger. HKEX wants to demonstrate that the proposed merger is far preferable to LSE Group's proposed takeover of Refinitiv. The Hong Kong Stock Exchange has indicated to the London Stock Exchange Group that it has made detailed preparations for this plan. In addition, HKEX has also held preliminary constructive discussions with relevant regulators and policymakers. The Board of HKEX continues to believe that this proposal will be of great benefit to shareholders, clients and the global capital market as a whole. HKEX believes that shareholders of LSE Group should have the opportunity to analyze both transactions in detail and will continue to engage with them.
1.2 Hong Kong's blockchain layout is active
Hong Kong Monetary Authority develops blockchain trade finance platform. On October 31, 2018, the "Trade Linkage" of the Hong Kong Monetary Authority was officially launched. The former name of "Trade Linkage" was "Hong Kong Trade Finance Platform". The trade financing platform jointly developed by the alliance is also the first large-scale cross-bank blockchain project in Hong Kong.
The Hong Kong Monetary Authority is actively exploring central bank digital tokens. In May 2019, the Hong Kong Monetary Authority and the Bank of Thailand signed a memorandum of understanding to promote regulatory cooperation between the two parties and promote financial innovation. On July 19, 2019, the deputy governor of the Bank of Thailand stated that the central bank’s digital token research project in cooperation with the Hong Kong Monetary Authority is entering the third phase.
The Hong Kong Securities Regulatory Commission is actively exploring the regulation of digital assets. In November 2018, the Hong Kong Securities Regulatory Commission announced new regulations on digital assets to explore regulatory sandboxes. If the new regulations can be implemented smoothly, Hong Kong may take the lead in attracting a large number of high-quality digital asset-related resources, and even play an "ice-breaking" demonstration effect at the regulatory level, accelerating the maturity of digital asset regulatory policies and the compliance of the industry.
Compared with the Hong Kong Monetary Authority and the Securities Regulatory Commission, the blockchain layout of the Hong Kong Stock Exchange is earlier.
Hong Kong Stock Exchange and ASX launched blockchain cooperation. In March 2018, according to the British "Financial Times", the Hong Kong Stock Exchange is cooperating with the Australian Stock Exchange (ASX) to develop blockchain technology.
The HKEx's 2019-2021 strategic plan has repeatedly mentioned blockchain. In February 2019, the Hong Kong Stock Exchange released the "Strategic Plan 2019-2021". Technology, including artificial intelligence, blockchain, cloud computing infrastructure and data analysis, optimizes operating procedures, strengthens ties with customers, and mobilizes all links in the value chain to improve cost-effectiveness", "For example, after the Shanghai-Shenzhen-Hong Kong Stock Connect Application of blockchain technology in distribution".
In the past two years, Hong Kong’s digital asset supervision has gradually become clear. At the same time, the Hong Kong Stock Exchange has continuously accelerated the layout of blockchain and digital asset transactions. The launch of the digital asset trading business may not be far away.
1.3 The crisis of native exchanges is gradually emerging
From barbaric growth to compliant development. For many years, the digital asset trading industry has been in a state of barbaric growth, with low barriers to entry and lack of supervision. There is no scarcity of native digital asset exchanges. There are countless incidents of exchanges being stolen and run away in history. After years of development, leading exchanges have accumulated certain advantages, and the industry is gradually moving towards compliance. However, the industry structure is not yet stable and the market competition is fierce.
Compliant exchanges are highly recognized. Judging from the current situation, Coinbase, as a representative of compliant digital asset exchanges, has been highly recognized by the market, and even produced the Coinbase effect, that is, the listing of a certain token on Coinbase may usher in a wave of rising prices. According to this speculation, once the traditional securities and futures exchange enters the market, it will be a disaster for the original digital asset exchange.
The cross-border marriage of the Hong Kong Stock Exchange has sent a clear signal: the time left for native digital asset exchanges is running out.
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2 Market: Shock upwards, a breakthrough is imminent
2.1 Overall market:
Shock up
The total market value of digital tokens this week was US$268.38 billion, an increase of US$2.7 billion or about 1.0% compared to last week. After a slight recovery last week, the market continued to fluctuate upwards this week.
The USDT market cap is $4.10 billion, an increase of $30.86 million from last week. At present, the enthusiasm for funds entering the market has declined, and the USDT premium has decreased, with only a small premium.
2.2 Core Token:
Mainstream tokens oversold and rebounded
The current price of BTC is $10,361, with a weekly increase of 0.1% and a monthly increase of 3.1%. This week, the average daily trading volume of BTC was 15.2 billion US dollars, and the average daily turnover rate was 8.2%. BTC remained volatile this week and underperformed other mainstream tokens.
The current price of ETH is US$181.1, with a weekly increase of 6.6% and a monthly decrease of 2.9%. This week, the average daily trading volume of ETH was 6.5 billion US dollars, and the average daily turnover rate was 33.7%. ETH had a large adjustment in the early stage and rose slightly this week.The current price of EOS is $3.72, with a weekly increase of 15.4% and a monthly increase of 1.6%. The average daily trading volume of EOS this week was $1.9 billion, with an average daily turnover rate of 55.3%. EOS was oversold in the early stage and rebounded strongly this week.
The current price of XRP is $0.256, with a weekly increase of 1.3% and a monthly decrease of 3.0%. The average daily trading volume of XRP this week was $1 billion, with an average daily turnover rate of 9.0%.
The monthly volatility of major tokens continued to drop this week. The monthly volatility of BTC was 13.9%, down 2.9% from last week; the monthly volatility of ETH was 15.1%, down 3.9% from last week; the monthly volatility of EOS was 17.9%, A decrease of 0.1% from last week; the monthly volatility of XRP was 11.0%, a decrease of 4.9% from last week. The volatility of mainstream tokens dropped slightly this week.
2.3 BICS industry: the market value of the supply chain industry and the number of certificates have dropped significantly
The secondary industries of BICS with a more obvious increase in the number of tokens this week are physical assets, non-bank finance, and performance optimization, which increased by 25.0%, 16.7%, and 10.5% respectively compared to last week; BICS, which saw a significant decline in the number of tokens this week The secondary industry is the supply chain, which decreased by 50.0% compared with last week.
2.4 Market opinion:
Breakthrough is imminent
After recent adjustments, market risks have been gradually released. In the long run, high-quality tokens have a lot of room for imagination. It is still in the early stage of the bull market, and callbacks are rare opportunities to increase positions. Investors can make asset allocation according to their own conditions.
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3 Output and popularity: Mining difficulty and computing power have increased significantly
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4 Industry news: Libra is in contact with multinational regulators
4.1 The Libra Association is committed to launching Libra in the second half of 2020
According to news from Cointelegraph on September 13, Bertrand Perez, chairman of the Libra Association, said in an interview that the company is committed to launching Libra in the second half of 2020. Perez confirmed that Libra will be pegged to a range of major currencies at launch, but not to the Chinese yuan.
4.2 Binance and OKEx expand the scope of repurchase and destruction business
According to the official announcement of Binance, all new business of Binance in the future will be included in the statistical scope of BNB quarterly burning, and the BNB circulating in the market will be destroyed.
4.3 Saudi Arabia and the UAE will complete the national digital token pilot project before the end of the year
According to news from Argaam on September 11, Hisham Al Hogail, deputy governor of the Saudi Arabian Monetary Authority (SAMA) in charge of banking, said that Saudi Arabia and the United Arab Emirates will complete the pilot work of digital tokens for cross-border bank transactions by the end of the year. The pilot work will likely focus on technical aspects, while legal and economic aspects will be reviewed at a later stage. In January 2019, SAMA and the Central Bank of the United Arab Emirates (UAECB) jointly launched Aber, a digital token project aimed at facilitating cross-border settlement between the two countries.
According to news from Argaam on September 11, Hisham Al Hogail, deputy governor of the Saudi Arabian Monetary Authority (SAMA) in charge of banking, said that Saudi Arabia and the United Arab Emirates will complete the pilot work of digital tokens for cross-border bank transactions by the end of the year. The pilot work will likely focus on technical aspects, while legal and economic aspects will be reviewed at a later stage. In January 2019, SAMA and the Central Bank of the United Arab Emirates (UAECB) jointly launched Aber, a digital token project aimed at facilitating cross-border settlement between the two countries.
4.4 The central bank of Singapore said it was discussing the launch of Libra with Facebook
According to Bloomberg News on September 12, the central bank of Singapore said it was discussing the launch of Libra with Facebook. The Monetary Authority of Singapore said in an emailed statement that the central bank is actively engaged in discussions with Facebook about the launch of Libra, which is still in its early stages of development.
4.5 Swiss regulators ready to work with other countries to ensure regulation of Libra
