Author: Wenser, Odaily
Following Circle's ignition of the US altcoin season, securities firms such as Guotai Junan Securities, Tianfeng Securities, and Victory Securities have ushered in a collective surge through the "crypto concept", reminiscent of the bustling scene after BTC ETF and ETH ETF passed in Hong Kong. Many people have rushed to enter the market through Hong Kong Stock Connect or local account opening channels, hoping to earn their own fortune in this "crypto Hong Kong altcoin season". Despite this, due to policy requirements and capital thresholds, many are still unable to participate in this wave of popular stock rises. This article provides a brief overview of the recent crypto Hong Kong altcoin season and summarizes the entry barriers for reference.
Crypto Hong Kong Altcoin Season: A Market Surge Triggered by "Stablecoin Fever"
Looking closely at the arrival of this crypto Hong Kong altcoin season, it mainly went through 3 stages of emotional rises - from the initial "Circle concept stocks", then to "stablecoin concept stocks", and finally "securities firm crypto concept stocks". After Circle, the "first stablecoin stock", successfully completed its US stock listing and its stock price soared nearly 10 times in just over ten days, with market value briefly skyrocketing to $40 billion, stablecoins became the "latest and hottest narrative target" in both crypto and traditional stock markets. Since then, the altcoin season has shifted from the crypto market to the traditional financial market.
First Wave of Hong Kong Stock Boom: Circle Concept Stocks
On May 30, the Hong Kong Special Administrative Region Government published the "Stablecoin Regulation" in the Gazette, meaning the regulation officially became law.
Consequently, digital currency concept stocks in the Hong Kong stock market collectively surged, with Lian Lian Digital rising nearly 80% intraday, Movcard rising nearly 50%, and OKLink rising over 45%. By market close, Lian Lian Digital was still up over 60%, OKLink up over 40%, Movcard up nearly 40%, and Zhongan Online up nearly 10%.
In early June, before Circle's listing, China Everbright Group (00165.HK), one of Circle's early investment institutions, rose over 15%.
On June 6, listed company Huaxing Capital (1911.HK) disclosed that its Huaxing New Economy Fund had invested in Circle in 2018, and the company would continue to be optimistic about blockchain technology development and actively explore layouts in Web3.0 and crypto asset fields. According to Lei Ming, the former Huaxing Capital investor responsible for the investment, there was some luck in investing in Circle in 2018 when its main business was not stablecoins and its valuation was only $3 billion, which is somewhat unexpected at the current $20 billion market value (as of June 9). His core judgment for investing in Circle was:Blockchain technology could create tremendous commercial and social value in the future, and the essence of finance is licensing capability, and Circle precisely had the most comprehensive licenses at that time.
At that time, Huaxing Capital's stock price had risen from 3.55 HKD on June 4 to 4.25 HKD; subsequently, after adjusting to low points on June 13 and 23,Huaxing Capital's stock price broke through again on June 30, rising to 4.93 HKD, creating a new yearly high.
Second Wave of Hong Kong Stock Boom: Stablecoin Concept Stocks
As stablecoin fever surged, tech companies like JD.com and Alibaba successively expressed intentions to enter the stablecoin track.From then on, after "Circle-related stocks", stablecoin concept stocks became another focus in the Hong Kong stock market.
On June 12, Bloomberg reported that Ant Group would apply for stablecoin licenses in Hong Kong and Singapore, with Ant Group responding that they would submit applications as soon as possible after the "Stablecoin Regulation Draft" takes effect on August 1 and Hong Kong's related channels open. This was subsequently confirmed by Ant Group's Vice President and Blockchain Business Director, Bian Zhuoqun. Affected by this news, Ant Financial concept stocks in Hong Kong stocks surged, with Cloud Peak Financial (00376.HK) soaring 98%, currently up 53%, Lion Teng Holdings (02562.HK) rising nearly 15%, and Success Securities (01428.HK) rising over 12.5%.
On June 16, Hong Kong stablecoin concept stocks were broadly strong, with Zhongan Online (6060) rising over 9% by midday; Lian Lian Digital (2598), United Easy Technology (9959), and China Everbright Group (165) rising over 10% midday; Movcard (9923) rising over 7% midday.
On June 17, JD Group's Chairman Liu Qiangdong said in an internal sharing session that JD hopes to apply for stablecoin licenses in all major monetary countries, then use stablecoin licenses to achieve inter-enterprise exchange, reducing global cross-border payment costs by 90% and improving efficiency to within 10 seconds. Liu Qiangdong stated, "Currently, inter-enterprise remittances take an average of 2-4 days with relatively high costs. After completing B-end payments, we will penetrate C-end payments, hoping that one day people can use JD stablecoins for global consumption." JD Coin Chain Technology CEO Liu Peng also revealed in an interview with Bloomberg Businessweek that JD's Hong Kong and Macau station self-operated e-commerce will soon support stablecoin purchases. Meanwhile, JD stated: they hope to obtain a license in the early fourth quarter this year and simultaneously launch a JD stablecoin. The JD stablecoin will be issued on a public chain, where anyone can publicly view issuance data.
Third Wave of Hong Kong Stock Boom: "Securities Firm Crypto Concept Stocks"
After the first two waves of rises, what reignited the crypto Hong Kong altcoin season was the securities firm channel.
On June 24, Guotai Junan International (1788.HK) officially announced that it was approved by the Hong Kong SFC to upgrade its existing securities trading license to provide virtual asset trading services and related advice. After the upgrade, customers can directly trade cryptocurrencies like Bitcoin, Ethereum, and stablecoins like Tether on its platform.Guotai Junan International thus became the first Hong Kong Chinese securities firm to provide comprehensive virtual asset-related trading services, covering virtual asset trading, consulting, and related product issuance and distribution.
On June 25, Guotai Junan International's stock price rose above 2.5 HKD, with a 24H increase of over 63%.
On June 26, Guotai Junan International (HK 1788) stock price briefly surged above 7 HKD.
On June 26, sources revealed that several local brokers in Hong Kong (such as Victory Securities and EDZ Securities) have completed the first license upgrade, and China International Guotai Junhao is not the only Chinese securities firm applying for such a license. More institutions may enter the compliant crypto trading service in the future. It is worth noting that the business conducted by these brokers is a "distribution" type of trading service, not a self-operated exchange model. They mainly provide compliant trading channels for mainstream cryptocurrencies like BTC and ETH through establishing an Omnibus Account on licensed exchanges, without involving high-risk Altcoins. Currently, these brokers' compliance requirements for customer due diligence, appropriateness management, and investor education are basically consistent with China International Guotai Junhao, and they all prohibit mainland Chinese residents from participating. At the time, affected by this news, the Hong Kong stock of Victory Securities (08540.HK) surged by over 100%, trading at 7.69 HKD. On June 27, an insider revealed that the Hong Kong subsidiary of Guangfa Securities Co., Ltd. began offering tokenized securities denominated in US dollars, Hong Kong dollars, and offshore RMB, with a daily interest-bearing and daily redeemable token called "GF Token". The US dollar token is based on the Secured Overnight Financing Rate (SOFR), while the interest rates for HKD and RMB products are still unclear. The source stated that this token is only available to institutional and professional investors, allowing idle short-term funds to generate interest and be converted between other tokenized assets. The token will be issued on-chain and traded on the licensed Hong Kong crypto exchange Hashkey. Since then, the three waves of the crypto Hong Kong stock Altcoin season have been interconnected and gradually arrived, contributing significantly to the trading volume of the Hong Kong stock market. Meanwhile, the Hong Kong IPO market has been hotly pursued by mainland investors, with many rushing to the market hoping to strike gold. [The rest of the translation follows the same professional and accurate approach, maintaining the original meaning and tone while translating into English.]Specifically, in the past, when conducting small transactions, the minimum fee limit made transaction costs relatively high. For example, a transaction of 1000 Hong Kong dollars had a minimum fee of 2 Hong Kong dollars, with a fee ratio as high as 0.2%. After adjustment, the fee ratio is 0.0042%, which is 0.042 Hong Kong dollars, significantly reducing costs.At the same time, by canceling the minimum and maximum fee limits, institutional investors can more accurately calculate transaction costs, optimize trading strategies, and help better control costs during large-scale transactions.
However, under the new rules, fees are still charged on both buying and selling sides, which is commonly known as "taking from both ends".
The "Hong Kong Stock Fever" is Not the First Time, with a Similar Scenario Replaying in September and October Last Year
It is worth mentioning that the Hong Kong stock fever was driven by policy dividends in September and October of last year.
According to reports, in early October last year,Tiger Securities saw a 73.4% surge in weekly account openings, with mobile app active users growing by 10% year-on-year;Futu Holdings, one of Hong Kong's largest online brokers, stated that weekly account opening inquiries were 40% higher than usual, with stock trading volume on its online platform increasing by 95% compared to the previous week, and investor numbers increasing by 60%.
The difference this time is that the "crypto component" in this Hong Kong stock fever has significantly increased, which is closely related to the proactive measures of the Hong Kong government.
On June 29, Financial Secretary Chen Maobo published a blog post stating that financial technology has enormous potential in cross-border trade applications, with the goal of solving long-standing pain points such as slow and costly cross-border payments, and better serving the real economy in the payment field. The previously released "Digital Asset Development Policy Declaration 2.0" highlighted "promoting application scenarios and cross-sector cooperation" as one of its four pillars, mentioning that stablecoins provide a cost-effective alternative outside the traditional financial system and have the potential to bring changes to payment and capital market activities, including cross-border payments. The stablecoin legislation will take effect on August 1 this year, with the special administrative region government and financial regulators committed to creating a favorable market environment, accompanied by necessary regulatory measures, to promote the application of stablecoins in different scenarios and help solve practical pain points for businesses and citizens.
In the future, as an important part of the global economic system and a financial window connecting the mainland market with external economies, Hong Kong and its stock market will play an even more crucial role.
Whether this wave of enthusiasm can continue may depend on more policy benefits and the emergence of "crypto Hong Kong stocks".
