Taking advantage of this environment, HashKey Exchange became the first crypto firm in the city to obtain a license under the new licensing regime last month.
HashKey Capital, the investment arm of Hong Kong-based financial services firm HashKey Group, has announced the launch of a secondary market crypto fund focused on investment in altcoins. The firm, which has over $1 billion in assets under management (AUM) and recently closed its third venture fund at $500 million, is looking to raise $100 million for the new fund over the next 12-month period.
According to a Thursday Reuters report, its potential clients include high-net-worth investors and Asian family offices. Portfolio manager, Jupiter Zheng Jialiang emphasized that the bulk of the fund’s investments will be in altcoins, with less than half going towards leading cryptocurrencies Bitcoin and Ethereum and a portion expected to be in cash. The firm hopes to build on its experience in crypto venture investment to grow its investment in second-tier cryptocurrencies.
Hong Kong has proven to be a crypto-friendly region, with the government inviting the participation of both local and international players in the local crypto and Web3 ecosystem. The has already held about 100 crypto-related conferences this year alone.
Taking advantage of this environment, HashKey Exchange became the first crypto firm in the city to obtain a license under the new licensing regime last month. The license allows HashKey Exchange to offer crypto trading services to retail clients, which it started offering on Monday. HashKey Chief Operating Officer Livio Weng revealed that the exchange was optimistic about the new offering.
“We hope to grow our registered user base to between 500,000 to 1 million by the end of this year,” Weng said. “We’re also anticipating a more bullish market next year. If that’s the case, we would target to serve 10 million users by 2025.”
Zheng Jialiang told Reuters that HashKey Capital is developing distribution channels with some offshore Chinese financial institutions, noting that weakness in the Hong Kong stock market has driven investors towards diversified strategies.
“We see untapped demand from professional investors who wish to chase (above-market) alpha (returns) in crypto,” said he.
The portfolio manager believes the crypto market is approaching a bottom and expects liquidity to improve as the US rate peaks and assets managers in that country continue to file spot Bitcoin ETF applications.