Hong Kong's OTC market tops China't in volume

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Hong Kong's OTC market tops China't in volume

The active over-the-counter crypto market in Hong Kong, despite a much smaller population, generated $64 billion in volume, not too far below China's $86.4 billion.

While data shows that the value of transactions in both China and Hong Kong have dropped over the last year because of Beijing's continued strict prohibition on crypto assets and a prolonged decline in the crypto market, Chainalysis contends that the presence of large OTC markets - and their relative stability in the face of both regional and global decline - shows a certain degree of tolerance by Beijing to crypto.

The Chinese government's growing status as a crypto hub may signal that the government is reversing course on digital assets or at least becoming more open to crypto initiatives, the report said.

Chainalysis said Hong Kong dominates in large institutional crypto transactions compared to other Asian regions. The data shows that 46.8 percent of Hong Kong's annual crypto trades were institutional transactions exceeding $10 million, while retail trades under $10,000 accounted for just 4% of the city's volume, marginally below the global average of 4.7%.

On the other hand, South Korea is heavily influenced by retail trading on centralized exchanges, with 'professional' traders between $10,000 and $1 million in transaction volume making up 40% of the transaction volume.