Hong Kong’s over-the-counter (OTC) crypto market has been active, with a trading volume of $64 billion in the last year, which is not too far below China’s $86.4 billion, despite Hong Kong having a much smaller population and the global chill through crypto markets. The value of transactions in both China and Hong Kong has dropped over the last year due to Beijing’s continued strict prohibition on crypto assets and a prolonged downturn in the crypto market. However, Chainalysis argues 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. Chainalysis also notes that Hong Kong dominates in large institutional crypto transactions compared to other Asian regions. Its data shows that 46.8% 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%. This indicates that Hong Kong’s growing status as a crypto hub may signal that the Chinese government is reversing course on digital assets or at least becoming more open to crypto initiatives.
On the other hand, South Korea leans heavily on retail trading on centralized exchanges, with “professional” traders between $10,000 and $1 million in transaction volume making up 40% of volume. In conclusion, Hong Kong’s OTC market has been active despite the global chill through crypto markets. The presence of large OTC markets shows a certain degree of tolerance by Beijing to crypto. Hong Kong dominates in large institutional crypto transactions compared to other Asian regions. South Korea leans heavily on retail trading on centralized exchanges.