Hong Kong Institutional Investors Plans to Reduce Involvement in Crypto

Following several downturns in the global digital assets market, institutional investors in Hong Kong plan to reduce the amount of their portfolio’s exposure to cryptocurrency fluctuation. 

In the past, Hong Kong was one of the few nations that were regarded as ‘best prepared’ for the adoption of digital assets. Although no particular legislation or regulation on cryptocurrencies had been enforced by the authorities.

According to a survey carried out by London-based cryptocurrency exchange Bitstamp, over 9% of Hong Kong’s institutional investors in Q2 declared their intentions to reduce or eventually remove cryptocurrency options in their investment plans. Meanwhile, in the previous quarter, it was only three percent making it a 200% increase in the lack of interest in crypto investments.

Based on the record, Hong Kong currently boasts about 253 institutional investors. However, of these 253 institutional investors, about 74 of them announced in Q2 that they would increase their digital assets investments. Per a report published by Bitstamp, the volume of investors surveyed in both quarters was roughly the same.

James Quinn who is the managing partner of Q9 Capital, a crypto investment platform for institutions and high-net-worth individuals which has its headquarters in Hong Kong attested to the inactiveness of many of the investors. 

He suggested that Hong Kong investors might be more interested in another asset class. 

“It is true that retail investors and the institutions who serve them are less active in crypto and perhaps looking for other assets in the short term,” James Quinn said.

TerraUSD Crash-Induced Crypto Winter Creates Market Downtrend

Notably, the TerraUSD collapse in May has not made it easy for many cryptocurrency firms. 

The unprecedented fall ended up wiping out hundreds of billions from the crypto ecosystem as the prices of several digital assets plummeted by more than 100%. Non-fungible tokens (NFTs) are not left out of this fall, as prices of land in the Metaverse have reduced partly as a result of investors’ exit from the market.

Bitcoin (BTC) which had reached an all-time high of $68,000 in November last year has been on a downtrend since the beginning of the year.

It has currently reached below $20,000 and has made it riskier for investors to plunge their funds for the fear of losing capital. Many cryptocurrency exchanges are even faced with the possibilities of liquidation and bankruptcy. At the moment, a few of them has been declared insolvent.