Hong Kong Maintains Strong OTC Crypto Market, Defies Global Downturn

A recent report by Chainalysis on October 2 reveals that Hong Kong has managed to maintain a strong over-the-counter (OTC) crypto market, despite the global downturn in crypto prices and the stringent regulations imposed in mainland China. The report states that between July 2022 and June 2023, Hong Kong recorded approximately $64 billion in crypto transactions, making it the fifth-largest cryptocurrency market in East Asia.

Hong Kong as a Crypto Hub

Chainalysis suggests that the robust OTC market in Hong Kong may indicate a shift in the Chinese government’s stance towards cryptocurrency. This suggests a potential openness or a less hostile approach towards crypto initiatives. The report highlights Hong Kong’s dominant position in large institutional crypto transactions compared to other Asian regions.

Other Asian Markets

In contrast, South Korea heavily relies on centralized exchanges for retail trading, while Japan takes a balanced approach with a combination of centralized exchanges and decentralized finance (DeFi) protocols. The report also ranks the top 10 countries in terms of crypto adoption based on various factors.

Hot Take: Lower-Middle-Income Countries Contribute Significantly to Crypto Investments

The report also reveals that lower-middle-income countries like Vietnam, the Philippines, and Kenya contribute a significant portion of their capital towards cryptocurrency investments. Despite its crackdown on crypto trading and mining activities, China still holds ninth place in terms of crypto adoption due to its substantial number of users and miners who have shifted their operations overseas or into underground channels.

Kashif is a seasoned crypto writer with a Master’s degree in Software Engineering. He has been writing about cryptocurrencies since 2019 and has contributed to renowned publications like NewsBTC, Bitcoinist, TWJ, and NetflixSavvy. Follow him on Twitter & LinkedIn. The presented content may include the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.