In a recent report, blockchain analytics firm Chainalysis highlights the enduring significance of East Asia in the global cryptocurrency landscape, accounting for nearly 8.8% of all global transactions. Despite a challenging year for the cryptocurrency market and China’s stringent regulatory measures, Hong Kong’s active over-the-counter (OTC) cryptocurrency market impressively recorded $64 billion in trading volume. Notably, this figure closely follows China’s $86.4 billion, despite Hong Kong’s significantly smaller population and the prevailing cryptocurrency market downturn.
Resilience in East Asia’s OTC Markets
While data reveals a decline in transaction values in both China and Hong Kong over the past year, primarily due to Beijing’s ongoing ban on cryptocurrency assets and the extended cryptocurrency market slump, Chainalysis suggests that the existence of robust OTC markets signals Beijing’s increasing tolerance towards cryptocurrencies.
Chainalysis posits, “The growing proximity between China and Hong Kong leads some to speculate that Hong Kong’s emerging status as a cryptocurrency hub may indicate a potential shift in the Chinese government’s stance towards digital assets, or at the very least, a greater openness to cryptocurrency initiatives.”
Hong Kong’s Prominence in Institutional Transactions
Chainalysis further underscores Hong Kong’s exceptional position in large institutional cryptocurrency transactions when compared to other Asian regions. Their data reveals that a significant 46.8% of Hong Kong’s annual cryptocurrency trades constitute institutional transactions exceeding $10 million, while retail trades under $10,000 account for just 4% of the city’s cryptocurrency volume. This percentage falls slightly below the global average of 4.7%. In contrast, South Korea predominantly engages in retail trading on centralized exchanges, with “professional” traders conducting transactions ranging from $10,000 to $1 million, constituting 40% of the total volume. Meanwhile, Japan’s transaction breakdown closely aligns with global trends, demonstrating a balance between centralized exchanges and decentralized finance (DeFi) protocols.
Disclaimer: This article is for informational purposes only and should not be considered as financial or investment advice. The viewpoints and interpretations outlined in the Chainalysis report are their own and do not necessarily reflect the perspectives of Clout Scoop News or its affiliates. Readers are strongly advised to conduct thorough research and seek professional guidance before participating in cryptocurrency-related activities.
