An expanding collection of Hong Kong-based cryptocurrency investors are reportedly turning to U.S.-based bitcoin futures. The shift clear of home markets has been spurred by way of a belief that the American futures markets obtain higher regulatory oversight than Hong Kong’s unregulated cryptocurrency exchanges.
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Demand for Exposure to U.S. Bitcoin Futures Markets Surges Among Hong Kong Traders
The chairman of the Hong Kong Stockbrokers Association, Gary Cheung, instructed South China Morning Post that native futures agents have reported an build up in buying and selling task at the American futures markets.
Mr. Cheung described the kinds of cryptocurrency conventional investors in quest of to get admission to bitcoin futures markets, mentioning “There are two types of Hong Kong investors who like to trade US bitcoin futures. There are bitcoin miners and other investors who trade bitcoin and want to use the futures products to hedge. The others are normal futures investors who purely want to take profit created by speculative futures trading.”
Gary Leung, the executive govt officer of TD Ameritrade, additionally attested to the top call for for publicity to U.S-based bitcoin futures markets amongst Hong Kong-based consumers, mentioning “We have received a lot of inquiries about bitcoin futures since we started operating in Hong Kong last October when the prices were surging.”
Lack of Regulatory Oversight Deters Investors From Local Exchanges
Due to bitcoin’s juridical standing comprising that of a commodity, cryptocurrency exchanges don’t seem to be regulated by way of the Hong Kong Monetary Authority – prompting many investors to discover global platforms which are observed to be offering higher regulatory oversight than native exchanges.
Benny Mau of China Securities International Finance Holdings defined the worries held by way of many Hong Kong-based investors, mentioning “Bitcoin and other digital currencies are basically not regulated in Hong Kong because they are traded like commodities. If the digital currency platforms have a problem or are hacked, the investors may suffer losses because the regulators might not do anything for them. This has discouraged many Hong Kong investors from trading digital currencies in Hong Kong.”
“Instead, they’re trading them on the US exchanges, which are regulated. The futures prices may go up and down substantially but investors do not need to think about the counterparty risk or worry about the platforms having a problem. This is why bitcoin futures in the US are more attractive to Hong Kong investors, Mr. Mau added.”
Shifting Market Conditions
Jasper Lo Cho-yan, a senior vice-president at Haitong International, has recommended that transferring marketplace prerequisites can be contributing to the perceived migration of Hong Kong investors clear of native cryptocurrency exchanges.
“When bitcoin futures were launched last December, the bitcoin price was rising and everyone was optimistic. Now the price has tumbled and speculators may be finding it harder to make money. In addition, many governments are increasing regulation of bitcoin and other digital currencies. This has raised questions about the outlook for the futures products,” Jasper Lo Cho-yan stated.
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