长坡厚雪，寻找香港加密货币「独角兽」
Original author: Zhou Zhou, Foresight News
Sequoia Capital, IDG, Northern Lights, etc. are all already looking for opportunities to invest in Hong Kong cryptocurrency exchanges. Venture capital institutional investor Henry told me.
In addition to venture capital institutions, Foresight News observed: Internet companies (Futu Securities, Tiger Brokers, etc.), cryptocurrency giants (OKX, Bitget, Binance, etc.), traditional financial institutions (Victory Securities, Interactive Brokers, Harvest Fund, etc. ) are also pouring into Hong Kong’s cryptocurrency industry, hoping to take advantage of Hong Kong’s policy to get tickets for the next era.
There will definitely be a unicorn in the Hong Kong crypto industry.According to Adam Zhou, co-founder of VDX, a Hong Kong cryptocurrency company, Adam Zhou was previously the managing director of Victory Securities in Hong Kong and has more than 10 years of experience in financial institutions.
This is going to be a multi-billion dollar market.Pan Zhiyong, CEO of OSL, a licensed cryptocurrency exchange in Hong Kong, told Foresight News.
2023 is the first full compliance year for Hong Kong’s cryptocurrency industry. This year, Hong Kong approved two cryptocurrency companies (HashKey and OSL) to become licensed financial institutions in Hong Kong. At the same time (as of January 31, 2024), 14 cryptocurrency companies were also announced that are applying for licenses. Unicorns in Hong Kongs cryptocurrency industry may be born among these 16 companies.
The heads of several cryptocurrency companies judged: (14) companies that are applying for licenses will be officially approved whether to obtain Hong Kongs cryptocurrency license before mid-2024.
As a new thing, Hong Kong’s crypto industry is not all smooth sailing. Many problems that have arisen in the process of rapid development have been put on the table one by one: it is difficult for top crypto exchanges to make profits, cumbersome account opening procedures, single products, fierce competition, and high costs...Is it too late for Hong Kong to embrace the cryptocurrency industry?Some practitioners also raised questions.
The latest data shows that there are currently more than 500 million people in the world holding cryptocurrency, and Binance exchange alone has more than 170 million registered users, while Hong Kong’s leading cryptocurrency exchange currently has less than 200,000 registered users. Only one thousandth of Binance users.
“Binance is big, but (future compliant cryptocurrency exchanges) can be many times bigger.”Adam Zhou said. Many practitioners remain firmly optimistic about the prospects of cryptocurrency exchanges in Hong Kong.
Can Hong Kong’s compliant cryptocurrency exchanges achieve the advantage of being a latecomer and overtake others around the corner? What are the real advantages and opportunities for Hong Kong’s licensed crypto exchanges? This has become a concern for everyone who cares about Web3 opportunities in Hong Kong, even Chinese-speaking regions and Asia.
Rediscovering unicorns
(We hope) to become a truly influential exchange like the Hong Kong Stock Exchange.Adam Zhou said.
As a new form of asset exchange,Some Hong Kong cryptocurrency practitioners believe that the emergence of cryptocurrency exchanges means the emergence of a new Hong Kong Stock Exchange and a new Nasdaq.
As of January 30, 2024, there were 2,600 companies listed on the Hong Kong Stock Exchange. Coinbase, the largest compliant cryptocurrency exchange in the United States, has listed 238 currencies. Binance, the worlds largest cryptocurrency exchange, has listed 386 currencies. Hong Kong HashKey Exchange, the leading licensed cryptocurrency exchange, has launched a total of 19 currencies. Cryptocurrency exchanges still have a long way to go.
It is foreseeable that Hong Kongs licensed cryptocurrency exchanges will not only list hundreds or even thousands of tokens in the future, but also non-Web3 institutions will choose to list coins on Hong Kongs licensed cryptocurrency exchanges.A co-founder of a cryptocurrency exchange told me: Start-up AI companies, game companies, and metaverse startups can also be listed on cryptocurrency exchanges. In theory, the SFC does not prohibit this.
The New York Stock Exchange was established in 1792, the American Exchange was established in 1817, Nasdaq was established in 1971, and Coinbase, the first cryptocurrency exchange in the United States, was established in 2012.In every century and every era, new exchanges appear, and what is behind them is a large-scale change in the economic form.
Due to different systems, the New York Stock Exchange usually attracts companies with large scale, long history, and stable development, such as Coca-Cola, Alibaba, and IBM; Nasdaq attracts more high-tech companies, such as the four major U.S. technology giants: Apple, Google, Amazon, Facebook; companies that list currency on cryptocurrency exchanges prefer blockchain organizations and Metaverse companies with smaller market capitalization, such as Ethereum, Binance and Boring Ape. The decentralized cryptocurrency exchange has changed traditional finance even more completely, and all individuals can be listed at almost zero cost.
For investors, this is undoubtedly an investment opportunity not to be missed, and indeed it is. Sequoia Capital, IDG, Northern Lights, etc. are all already looking for opportunities to invest in Hong Kong cryptocurrency exchanges. Henry, a venture capital institutional investor, said.
Henry added: “The position of venture capital institutions in the cryptocurrency industry is very embarrassing, because cryptocurrency has changed the entire underlying financial logic (including investment logic), making the position of venture capital institutions in this industry actually far less than that in other industries. High, many opportunities are obtained by more native Crypto investment institutions or individuals, but the Hong Kong cryptocurrency industry is a natural opportunity for us.
Some practitioners believe that as Asias financial center and backed by Chinas abundant Internet talents and market resources, Hong Kong has unique advantages in developing cryptocurrency. Japan, South Korea, Europe and other regions also have compliant crypto exchanges in their respective regions, but many investors are more optimistic about the Hong Kong cryptocurrency exchange.
HashKey Exchange CEO Weng Xiaoqi said: Europe lacks Internet talents, Japan lacks Internet talents, and it is not a financial center. Hong Kong is not only a financial center with sufficient financial institutions, but also has mainland China as its backing, which can continuously attract outstanding talents. Internet talents. Weng Xiaoqi believes: The talents required for compliant cryptocurrency exchanges must understand not only cryptocurrency, but also the operation of financial institutions, and Internet products. They are indispensable.
Throughout the development of science and technology and business in the 21st century, China seems to be rarely absent from technological forms that have undergone major changes in the economy and is good at latecomer advantages. If we must make analogies through reference objects,The relationship and world status between Hong Kongs cryptocurrency unicorn and Coinbase may be like Tencent and Facebook (Internet social networking), Alibaba and Amazon (Internet e-commerce), Wei Xiaoli and Tesla (electric and smart cars).
Such a narrative is grand and attractive enough, which makes Hong Kong’s cryptocurrency exchange a direction that many investors are scrambling to pay attention to.
Three tracks with long slopes and thick snow
The birth of a new unicorn is often accompanied by the successful solution of a big enough problem.
Compared with non-compliant exchanges, the unique problem that Hong Kong cryptocurrency exchanges need to solve is: how to deeply integrate cryptocurrency with traditional finance and accelerate the influx of funds from the traditional financial world into the crypto industry.This is an opportunity that non-compliant crypto exchanges have never had the opportunity to have before.
At present, in addition to the cryptocurrency exchange business that we are familiar with today, the competitiveness of Hong Kongs licensed cryptocurrency exchanges includes ETF, RWA, B2B2C cryptocurrency sales models, etc. Generally speaking, competitiveness comes from integration and innovation with the traditional financial world.
These three tracks are new enough, differentiated enough, and have promising business prospects. They are new increments that can affect the size of the entire cryptocurrency market.
HashKey Exchange CEO Weng Xiaoqi told Foresight News: ETF and RWA are opportunities for compliant cryptocurrency exchanges to overtake the curve.
Taking the U.S. Bitcoin Spot ETF as an example, since the passage of the U.S. Bitcoin Spot ETF on January 10, 2024, a large amount of funds have poured into Bitcoin.As of January 30, the total holdings of BlackRock and Fidelity exceeded US$2 billion, and the holdings of ten Bitcoin spot ETFs exceeded US$27.7 billion. Analysts at Standard Chartered Bank believe that by the end of 2024, the inflow of Bitcoin spot ETFs may reach US$50 billion to US$100 billion, which will be a huge increase for Bitcoin, which currently has a total market value of less than US$900 billion. Money flows in.
According to incomplete statistics from Foresight News, there are more than 70 upstream and downstream companies participating in Bitcoin spot ETFs in the United States, and a large part of them are traditional financial institutions in the United States.
And this is just the current situation of the U.S. Bitcoin spot ETF, which has just been launched less than a month ago.With the official launch of the U.S. Bitcoin spot ETF, Hong Kong’s Bitcoin spot ETF is also “on the horizon.”Tencent News First Line reported that on January 26, Harvest Fund Hong Kong Company has submitted an application for a Bitcoin spot ETF to the Hong Kong Securities Regulatory Commission. This is the first institution in Hong Kong to submit an application for a Bitcoin spot ETF. It is expected to be traded in Hong Kong after the Spring Festival. listed.
An executive at a cryptocurrency exchange revealed to me: There are currently more than a dozen or twenty financial institutions planning to apply for a Bitcoin spot ETF. Weng Xiaoqi previously told Caixin that about 10 fund companies are preparing to launch Bitcoin spot ETFs. Foresight News learned that institutions currently planning to launch Bitcoin spot ETFs include: Harvest Fund, Value Partners Fund, CSOP, etc.
In addition to ETFs, RWA (Tokenization of Real World Assets) is another large-scale track that only compliant crypto exchanges can participate in depth.
Weng Xiaoqi believes: The basis of RWA issuance is legal security tokens. If there is no license, it is illegal issuance of securities, which is a criminal offense in various countries and regions. That is to sayRWA was born to be a licensed exchange story.」
OKX Global Chief Commercial Officer Lennix told Foresight News:It is expected that Hong Kongs RWA and stable currency bills will be introduced in the third quarter of 2024. Relevant regulatory agencies such as the SFC have begun to consult the public for relevant opinions.
If the main function of ETF is to flow funds from the traditional financial field to Bitcoin and increase the overall market value of Bitcoin, then RWA is to tokenize all valuable financial investment products such as U.S. bonds, stocks, houses, and gold, thus Keep some of your money in these investment products in the crypto market. In this way, ordinary investors can conveniently purchase US$1 of U.S. bonds, US$1 of gold and US$1 of Tesla stock. This will further unleash the flow of traditional financial assets into the cryptocurrency industry.
Currently, financial institutions in the United States and Singapore are leading the way in the field of RWA. Henry, the founder of DigiFT, a compliant RWA exchange in Singapore, revealed to me: Currently, DigiFT has issued five tokenized financial products, including U.S. bonds, U.S. bond funds, bank bonds, etc. Hong Kong is also expected to introduce legal regulations on RWA this year. Foresight News learned that cryptocurrency exchanges such as HashKey and OSL attach great importance to this business and already have dedicated teams promoting RWA work.
Weng Xiaoqi revealed that he has already cooperated with China Asset Management on RWA and is expected to enter the market within a period of time.
Several cryptocurrency exchange practitioners told Foresight News: A major core competitiveness of Hong Kong cryptocurrency exchanges comes from B2B2C business. Like ETFs and RWAs, it is a B 2 B 2C business, that is, selling cryptocurrencies through traditional brokers. If the definition of B2B2C is broadened, it also includes the provision of SaaS services for crypto exchanges and financial institutions.
This is the differentiating advantage of licensed cryptocurrency exchanges compared to non-compliant cryptocurrency exchanges.
Adam Zhou said: Of the 300 active brokers (in Hong Kong), if 100 brokers sell a stock, (the entire market) is worth billions of dollars. This is also the opportunity for the encryption industry.
According to Foresight News statistics, there are currently more than 20 brokerages selling cryptocurrencies.A business leader of a crypto exchange revealed that more than half of the currently active brokerages are planning to enter the cryptocurrency business, including: Futu Securities, Interactive Brokers, Tiger Brokers, Victory Securities, etc.
Hong Kong’s financial and cryptocurrency industries have taken the first step towards substantial integration.
Compared with Binance (just taking the worlds largest cryptocurrency exchange as an example), the Hong Kong cryptocurrency exchange will be at a disadvantage in many areas in a short period of time: account opening is very cumbersome, the APP product experience is poor, there are few types of coins, and new coins There are few and slow methods, and derivatives cannot be made... The existing mature system is not the real competitiveness of Hong Kongs licensed cryptocurrency exchanges.
However, these three tracks with long slopes and thick snow are tailor-made opportunities for licensed cryptocurrency exchanges. They can not only bring incremental growth to the crypto industry, but are also an important competitiveness for its future business growth.
“The crypto industry has previously been shaped and dominated by crypto-native companies. However, with the conclusion of investigations by various U.S. regulatory agencies into companies such as Binance, a new era has arrived in which regulated cryptocurrency companies will become the standard and mainstream.” Pan Zhiyong said.
write at the end
An interesting phenomenon is that in the U.S. capital market, the market capitalizations of Coinbase and Nasdaq are already “equal.”
As of January 30, the total market value of Coinbase listed on Nasdaq was US$31.3 billion, and the total market value of Nasdaq was US$33.7 billion. Over the past three years, the total market value of these two exchanges has been showing a you chase trend. Im in a hurry.On the Nasdaq market, investors believe that Coinbase has the potential to become the next Nasdaq.
At the same time, the total market value of a leading crypto exchange in Hong Kong (HK$3.8 billion) is far different from that of the Hong Kong Stock Exchange (HK$298.7 billion). The reason for this is that the development of the entire Hong Kong crypto industry is still in its early stages, with 16 The jury is still out on who will become the unicorn among cryptocurrency exchanges.
HashKey Exchange just released the APP not long ago, and the number of users has exceeded 150,000; OSL has just been strategically invested by BGX with US$90 million, and the team has a new look and added retail genes to the existing system; the VDX core team was established after From the beginning, it has gathered the genes of cryptocurrency, the Hong Kong Securities Regulatory Commission, and Hong Kong financial institutions; OKX is at the head of native crypto exchanges, not only has its own products mature, but also has deep industry accumulation in China and Asia; PantherTrade is Chinas A subsidiary of Futu, the largest Internet brokerage, is born with the genes of Internet financial products... They will give a clear answer in the next five years.
This is an industry and track with long slopes and thick snow, and it has just begun.
