Declining Trust and Interest in Cryptocurrencies in Hong Kong
A recent survey conducted by the School of Business and Management at the Hong Kong University of Science and Technology (HKUST) reveals a growing aversion to cryptocurrencies among Hong Kong residents. This shift in sentiment poses challenges for Hong Kong’s goal of becoming a global hub for the cryptocurrency industry.
41% of Hong Kong Residents Prefer Not to Hold Crypto
The survey shows that 41% of respondents expressed a preference for not holding virtual assets, which is a 12% increase compared to earlier this year. Additionally, only 20% of those surveyed indicated a desire to hold crypto in the future, representing a 5% drop from earlier this year.
This decline in enthusiasm can be attributed to the fallout from the JPEX scandal, an allegedly fraudulent platform that led to financial losses for thousands of victims.
JPEX Scandal Impacts Crypto Sentiment
The JPEX cryptocurrency platform was involved in a financial scandal amounting to HK$1.57 billion (US$200.7 million). The scandal resulted in the arrest of 28 individuals, but the masterminds behind the scheme remain at large.
JPEX had attracted local retail investors with promises of high yields but abruptly halted customer withdrawals following a public warning from Hong Kong’s securities watchdog. This left some retail customers devastated as they lost their life savings.
Concerns About Lack of Understanding and Regulation
In recent years, virtual assets like cryptocurrencies and non-fungible tokens (NFTs) gained popularity in Hong Kong. However, many people lack understanding and make poor investment decisions.
A survey by the Investor and Financial Education Council (IFEC) found that 8% of retail investors in Hong Kong bought virtual assets this year, a significant increase from 2019. However, nearly 70% of respondents admitted to not understanding virtual assets well or at all.
More than half of the respondents expressed concerns about the lack of regulation in the industry, fearing potential fraud by investment platforms.
Hot Take: Declining Trust and Regulatory Concerns Impede Crypto Adoption in Hong Kong
The aftermath of the JPEX scandal has had a profound impact on the sentiment surrounding cryptocurrencies in Hong Kong. The survey conducted by HKUST reveals a significant decline in trust and interest among residents, with many expressing a preference for not holding virtual assets.
Poor understanding, overconfidence, and concerns about regulation further contribute to the hesitancy towards crypto investments. As Hong Kong aims to establish itself as a global hub for the cryptocurrency industry, it must address these challenges and rebuild trust among its residents.
By
By
By
By
By