The majority of virtual asset investors in Hong Kong are driven by the pursuit of short-term returns and view cryptocurrency as a promising investment trend. There is a prevalent fear of missing out on investment opportunities in this rapidly evolving market.
Key Findings from the “Retail Investor Research 2023” Report
According to the report conducted by the Department of Applied Social Sciences at the Hong Kong Polytechnic University:
- 75% of surveyed virtual asset investors in Hong Kong prioritize short-term returns.
- 74% of respondents consider virtual assets as a prominent investment trend, indicating their perceived growth potential and profitability.
- 73% expressed concerns about missing out on investment opportunities, reflecting the fear of being left behind in the market.
The study also identified common thinking patterns among virtual asset investors in Hong Kong. These patterns include:
- The reliance on readily available information, known as availability.
- The excessive emphasis placed on past information, known as anchoring.
- The tendency towards overconfidence, where investors believe they can outperform the market.
The findings suggest the need for improvement in financial management behaviors and attitudes among virtual asset investors in Hong Kong.
Implications and Recommendations
The Investment Committee emphasizes the importance of a comprehensive approach to investment decision-making. They advise virtual asset investors to:
- Exercise vigilance and protect their assets.
- Gain a thorough understanding of the characteristics and risks associated with investment products.
- Approach investment decisions with care, constantly reviewing and reflecting on their own behaviors and attitudes.
In June, Hong Kong implemented new regulations that allow retail investors to trade virtual assets instead of restricting it to professionals with a high net worth. The Securities and Futures Commission (SFC) has also started granting licenses to crypto exchanges.
OSL and Hashkey Group were the first crypto exchanges in Hong Kong to receive licenses from the SFC. They have partnered with ZA Bank, the largest online-only bank in Hong Kong, to provide crypto-to-fiat conversion services. Users can withdraw their crypto deposits in US dollars, Hong Kong dollars, and Chinese yuan.
Recently, crypto exchange Hong Kong VAEXC (VAEX) has applied for a virtual asset trading platform license with the SFC. The approval process for cryptocurrency products has been expedited by the Hong Kong government, following the JPEX scandal, which is considered one of the largest financial frauds in the city’s history. This initiative aims to promote compliance in the crypto industry.
