Hong Kong Crypto Traders Turn to U.S. Futures Markets
An increasing number of Hong Kong-based cryptocurrency traders are reportedly turning to U.S.-based bitcoin futures. The shift away from domestic markets has been spurred by a perception that the American futures markets receive greater regulatory oversight than Hong Kong’s unregulated cryptocurrency exchanges.
Demand for Exposure to U.S. Bitcoin Futures Markets Surges Among Hong Kong Traders
The chairman of the city Stockbrokers Association, city Cheung, told South China Morning Post that native futures brokers have reported a rise in mercantilism activity on the yank futures markets.
Mr. Cheung delineated the categories of cryptocurrency typical traders seeking to access bitcoin futures markets, stating “There area unit 2 styles of city investors World Health Organization prefer to trade United States of America bitcoin futures. There area unit bitcoin miners and different investors World Health Organization trade bitcoin and wish to use the futures merchandise to hedge. The others area unit traditional futures investors World Health Organization strictly wish to require profit created by speculative futures mercantilism.”
Gary Leung, the chief military officer of TD Ameritrade, conjointly authenticated to the high demand for exposure to U.S-based bitcoin futures markets among Hong Kong-based customers, stating “We have received plenty of inquiries regarding bitcoin futures since we tend to started in operation in city last October once the costs were billowing.”
Lack of Regulatory Oversight Deters Investors From Local Exchanges
Due to bitcoin’s juridical standing comprising that of a goods, cryptocurrency exchanges don't seem to be regulated by the city financial Authority – prompting several traders to explore international platforms that area unit seen to supply bigger regulative oversight than native exchanges.
Benny Mau of China Securities International Finance Holdings made public the considerations control by several Hong Kong-based traders, stating “Bitcoin and different digital currencies area unit essentially not regulated in city as a result of they're listed like commodities. If the digital currency platforms have a tangle or area unit hacked, the investors might suffer losses as a result of the regulators may not do something for them. This has discouraged several city investors from mercantilism digital currencies in city.”
“Instead, they’re mercantilism them on the United States of America exchanges, that area unit regulated. The futures costs might go up and down well however investors don't got to {think regarding|believe|consider|suppose|deem|trust|admit|accept|have confidence|have faith in|rely on|place confidence in} the counterparty risk or worry about the platforms having a tangle. this can be why bitcoin futures within the United States of America area unit additional enticing to city investors, Mr. Mau added.”
Shifting Market Conditions
Jasper Lo Cho-yan, a senior vice-president at Haitong International, has steered that shifting market conditions may additionally be causative to the perceived migration of city traders far from native cryptocurrency exchanges.
“When bitcoin futures were launched last December, the bitcoin value was rising and everybody was optimistic. currently the worth has tumbled and speculators is also finding it more durable to create cash. additionally, several governments area unit increasing regulation of bitcoin and different digital currencies. This has raised questions about the outlook for the futures merchandise,” opaque gem Lo Cho-yan aforementioned.
Much skepticism has been coming from the US futures market on bitcoin lately.
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