The broader crypto market has recently been described as “lackadaisical” by Galaxy Digital CEO Mike Novogratz, mainly due to a decrease in institutional interest in cryptocurrency buying. The lack of large-scale buyers has led to deflated enthusiasm in the markets, despite the constant bid from retail investors adding some stability. A report by Coinshare’s head of research, James Butterfill, detailed that institutional buying of digital assets saw outflows totaling $39 million as of last week, marking the sixth consecutive week of outflows.
However, Novogratz pointed to two significant developments in Asia that may help shift the tide. Chinese social media app WeChat now offers BTC price quotes on its app, which is considered a significant milestone given its 1.3 billion monthly active users. Additionally, Hong Kong has officially started allowing retail customers to trade crypto on regulated exchanges for the first time, signaling increasing Asian adoption.
Tommy Honan, the head of product strategy at Swyftx, agreed that the crypto market has “fizzled out” over the last month, attributing it to not only the decreased activity levels among institutional investors but also cost of living pressures affecting retail investors. Honan still expects a strong price recovery when large firms decide to jump back in, with either settled and sensible rules in place for crypto or a Republican win in next year’s U.S. elections.
Hong Kong presents a unique opportunity for the crypto market, potentially unleashing a new wave of investors and offering a place for U.S.-based firms to set up shop if needed. If Hong Kong is being used by mainland China as a testing ground for the safe adoption of crypto, it would be a significant tailwind for the market. As Hong Kong opens up for crypto-related business, more firms are currently competing to secure a license.
Source: Cointelegraph
