Hong Kong Crypto Traders Turn to U.S. Futures Markets

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Regulation

An growing variety of Hong Kong-based cryptocurrency merchants are reportedly turning to U.S.-based bitcoin futures. The shift away from home markets has been spurred by a notion that the American futures markets obtain better regulatory oversight than Hong Kong’s unregulated cryptocurrency exchanges.

Also Read: Bank of Thailand Bans Banks From Cryptocurrency Activities

Demand for Exposure to U.S. Bitcoin Futures Markets Surges Among Hong Kong Traders

Hong Kong Crypto Traders Turn to U.S. Futures MarketsThe chairman of the Hong Kong Stockbrokers Association, Gary Cheung, informed South China Morning Post that native futures brokers have reported a rise in buying and selling exercise on the American futures markets.

Mr. Cheung described the kinds of cryptocurrency typical merchants in search of to entry bitcoin futures markets, stating “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 chief govt officer of TD Ameritrade, additionally attested to the excessive demand for publicity to U.S-based bitcoin futures markets amongst Hong Kong-based clients, stating “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

Hong Kong Crypto Traders Turn to U.S. Futures MarketsDue to bitcoin’s juridical standing comprising that of a commodity, cryptocurrency exchanges usually are not regulated by the Hong Kong Monetary Authority – prompting many merchants to discover worldwide platforms which might be seen to provide better regulatory oversight than native exchanges.

Benny Mau of China Securities International Finance Holdings outlined the issues held by many Hong Kong-based merchants, stating “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

Hong Kong Crypto Traders Turn to U.S. Futures MarketsJasper Lo Cho-yan, a senior vice-president at Haitong International, has advised that shifting market circumstances might also be contributing to the perceived migration of Hong Kong merchants away from 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.

What is your response to the growing demand for regulated bitcoin futures merchandise amongst Hong Kong merchants? Share your ideas in the feedback part beneath!


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