Hong Kong may offer up a potential tailwind for East Asia as crypto volumes plummeted in Asia due to anti-crypto regulations in China, a Chainalysis report reads.
Cryptocurrency speculation has increased due to Hong Kong's growing status as a crypto hub.
A crackdown 'on virtually all things crypto' in the following years, however, saw activity decline drastically over the past few years.
Crypto trading volume has since fallen from one to five in Asia, leading to a drop in the region's ranking.
Over the last few years, it has fallen behind North America, Western Europe, Middle East and North African countries, Eastern Europe and Central & Southern Asia.
Crypto to fiat on and off ramp through direct exchange of cryptocurrencies between two parties outside of a traditional crypto exchange is possible through OTC desks.
Incompared to other East Asian nations like Japan and South Korea, Hong Kong had a higher volume of big transactions of $10 million or more. Chainalysis said that these high-volume trades were responsible for 46.8% of Hong Kong's crypto trades for the year.
The least institution-driven market in the region, according to the report, is South Korea.
In both Hong Kong and China, it reads that OTC desks and 'informal, gray market peer-to-peer businesses' are the main mediums of crypto activity.