HashKey’s $100M Fund to Focus on Altcoins, Less than 50% for BTC and ETH

HashKey's $100M Fund to Focus on Altcoins, Less than 50% for BTC and ETH

Exploring the Growing Trend of Altcoin Investments in Hong Kong’s Blockchain Industry

HashKey Capital, the investment arm of the Hong Kong-based crypto giant HashKey Group, is making waves in the blockchain industry by allocating a significant portion of its newly launched fund to major altcoins. This move highlights the growing confidence in alternative cryptocurrencies and their potential for substantial returns. While Bitcoin (BTC) and Ethereum (ETH) remain the dominant players in the cryptocurrency market, HashKey Capital aims to invest less than 50% of its allocation in these two cryptocurrencies, according to Jupiter Zheng, the fund’s portfolio manager, in a recent interview with Reuters.

With over $1 billion in assets under management, HashKey Capital has set an ambitious target of raising $100 million for the fund over the next 12 months. The fund has already garnered the interest of potential clients, primarily high-net-worth individuals and investment firms serving wealthy Asian families. This strategic move positions HashKey Capital as a major player in the growing altcoin investment landscape.

Alongside cryptocurrency investments, the fund also plans to hold a portion of its assets in cash. This diversification strategy aims to mitigate risks and provide stability in a rapidly evolving market. Moreover, HashKey Capital is diligently working on developing distribution channels with offshore Chinese financial institutions, thereby expanding its reach and influence across the Asian financial landscape.

The decision to invest in altcoins comes at a time when the Hong Kong stock market is experiencing a period of weakness, prompting investors to seek alternative and diversified strategies. This shift in priorities has led to the emergence of untapped demand from professional investors, who are seeking above-market returns in the crypto space. Jupiter Zheng explains, “We see untapped demand from professional investors who wish to chase above-market returns in crypto.”

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Zheng further asserts that the price of cryptocurrencies is reaching its bottom as industry liquidity improves. Various factors, such as the peaking US interest rates and the filing of spot Bitcoin Exchange-Traded Funds (ETFs) by large US asset managers, indicate a positive outlook for the cryptocurrency market. This optimism reinforces the belief that altcoins, which have traditionally experienced higher volatility compared to Bitcoin and Ethereum, have significant growth potential and could offer substantial returns to investors.

HashKey Group’s foray into altcoin investments is supported by its “Type 9 asset management license” granted by the Hong Kong Securities and Futures Commission. This license allows the company to exclusively manage portfolios consisting of virtual assets, reflecting the industry’s growing recognition and acceptance from regulatory bodies.

The HashKey Group, an end-to-end digital asset financial services group in Asia, is at the forefront of driving blockchain and crypto technology adoption. Earlier this year, the company closed a $500 million investment round for a fund that focuses on infrastructure, tools, and applications to facilitate the mass adoption of blockchain technology. This commitment demonstrates the group’s dedication to advancing the blockchain industry as a whole.

Hong Kong’s crypto-friendly stance and the government’s proactive approach to cryptocurrencies have attracted a multitude of digital asset firms to establish their presence in the city-state. The Securities and Futures Commission (SFC), the main financial regulator in Hong Kong, has implemented a crypto licensing regime, paving the way for licensed exchanges and allowing retail investors to trade specific “large-cap tokens” while ensuring safeguards such as knowledge tests, risk profiles, and reasonable exposure limits are in place.

The favorable regulatory environment in Hong Kong has led to the hosting of numerous crypto-related conferences and stimulated interest from over 80 virtual asset-related companies seeking to establish themselves in the city-state since the release of the policy statement on virtual assets in October 2022. In sharp contrast, the United States regulators have ramped up scrutiny of the industry following the collapse of FTX and other high-profile crypto companies.

As the blockchain industry continues to evolve and gain mainstream acceptance, the strategic move by HashKey Capital to invest in altcoins signals a shift in the investment landscape and the increasing recognition of the potential benefits of alternative cryptocurrencies. This forward-looking approach, combined with Hong Kong’s crypto-friendly environment, positions HashKey Group and the city-state as key players in the global blockchain ecosystem, attracting investment and fostering innovation in the years to come.

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