Survey Reveals 75% of Hong Kong’s Virtual Asset Investors Chase Short-Term Returns

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The majority of Hong Kong’s virtual asset investors chase short-term returns, embrace crypto as an investment trend, and fear missing opportunities. 

One of the key findings of the “Retail Investor Research 2023” report was that 75% of the surveyed virtual asset investors in the city-state invest in virtual assets with the intention of pursuing short-term returns. 

Additionally, 74% of respondents believed that virtual assets are an investment trend, indicating a widespread perception of their potential for growth and profitability. 

Another 73% expressed concerns about missing out on investment opportunities, showcasing the fear of being left behind in this rapidly evolving market.

The report, conducted by the Department of Applied Social Sciences at the Hong Kong Polytechnic University, examined the behavior of virtual asset investors in Hong Kong.

Common Thinking Patterns Among HK Crypto Investors

The study identified several common thinking patterns among virtual asset investors, characterized by shortcuts and biases. 

These patterns included the tendency to rely on readily available information, known as availability, and the excessive emphasis placed on past information, known as anchoring. 

Another prevalent pattern was overconfidence, where investors overestimated their abilities and believed they could outperform the market. 

These patterns, along with others, were categorized into five types, including “Following the Trend Type,” “Snake Bite Obedient Type,” “Own Experience Type,” “Intuition Expansion Type,” and “Wishful Thinking Type.”

Despite the respondents’ demonstrated knowledge of financial management, the study also revealed the need for improvement in their financial management behaviors and attitudes. 

The Investment Committee emphasized the importance of a comprehensive approach to investment decision-making. 

It advised investors to exercise vigilance and protect their assets, gain a thorough understanding of the characteristics and risks associated with investment products, and approach investment decisions with care, constantly reviewing and reflecting on their own behaviors and attitudes.

Hong Kong Launches New Regulatory Regime

Back in June, Hong Kong implemented its new regulatory framework for crypto.

The new rulebook allows retail investors the ability to trade virtual assets, instead of restricting digital assets trading to professional investors and traders with at least $1 million in bankable assets.

As part of the new regulations, the SFC has also started providing licenses to crypto exchanges. 

OSL and Hashkey Group have become the first crypto exchanges in the city to receive licenses from the SFC. 

They also enjoy crypto-to-fiat conversion services from ZA Bank, the largest online-only bank in Hong Kong. 

The bank allows users of the trading platforms to withdraw crypto deposits in US dollars, Hong Kong dollars, and Chinese yuan. 

More recently, crypto exchange Hong Kong VAEXC (VAEX) applied for a virtual asset trading platform license with the SFC. 

As reported, the JPEX scandal, regarded as potentially the largest financial fraud in Hong Kong‘s history, has further prompted the Hong Kong government to expedite the approval process for cryptocurrency products to promote compliance in the industry.

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