March 27, 2024
Hashkey Capital Partner Bullish on Hong Kong's Crypto Sector, Anticipates Growth Amid New Regulatory Landscape
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Hashkey Capital Partner Bullish on Hong Kong’s Crypto Sector, Anticipates Growth Amid New Regulatory Landscape

Jupiter Zheng, a partner at Hashkey Capital, the investment arm of Hong Kong-based crypto firm HashKey Group, is optimistic about Hong Kong’s preparedness for the upcoming wave of mass crypto adoption. He points to the increased influx of crypto talent and positive regulatory developments as key factors driving Hong Kong’s potential for significant growth over the next four to five years. Zheng highlights the emergence of new Web3 projects and the notable technological advancements in the crypto sector during the past 18 months.

Despite the prevailing bear market conditions, Zheng emphasizes the remarkable technological improvements, indicating the sector’s readiness for the next phase of mass adoption in the crypto world. He believes that the current market prices often overlook the sophisticated developments taking place in the crypto space.

“The actual technological improvement we’ve seen throughout the bear market has been quite astonishing. So I think from the technology side, we are very ready for the next wave of larger mass adoption in the crypto world,” said Zheng.

One of the driving factors for Zheng’s bullish outlook is the belief that Hong Kong’s economy needs a new catalyst for growth, and he sees the crypto sector as a potential driver. Acknowledging the economic challenges faced by Hong Kong, particularly due to the impact of COVID-19, Zheng suggests that crypto and Web3 could serve as the much-needed drivers for economic revitalization.

“The GDP in Hong Kong in recent years hasn’t been looking so good — largely due to Covid. So it needs a new driver. So it’s my theory that crypto and Web3 are the new drivers here,” Zheng said.

Hashkey became the first crypto exchange in Hong Kong to receive a specific license, allowing them to offer crypto assets to retail investors. While Zheng is not directly involved in the exchange arm of Hashkey, he anticipates growing demand for crypto products among local Hong Kong residents. He cites recent policy changes that provide retail investors with safety through insurance and legal protections, making it easier for them to engage in crypto investments through licensed exchanges.

Despite the ongoing bear market, Zheng expects a shift in outlook when the bull market returns, with retail investors returning, especially given the added security provided by licensed exchanges. He predicts that Hong Kong will witness a similar development pattern in Web3 as observed in the GameFi sector in Southeast Asia in 2021, where projects developed in the U.S. and Europe found a welcoming market in Asia.

Zheng acknowledges that growth in Hong Kong’s crypto sector may be less frenzied than the GameFi sector but anticipates a more regulated and focused approach to protocols and blockchain infrastructure. He notes that despite the recent JPEX crypto exchange scandal, which rocked Hong Kong, the region remains committed to its aspirations of becoming Asia’s crypto hub. The government has pledged to tighten regulations and enhance oversight to address illicit activities, showcasing its determination to foster a thriving and regulated crypto ecosystem.

Image by freepik

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