Most investors in virtual assets in Hong Kong are fearful of missing out on chances, embrace cryptocurrency as a trend in investing, and seek for short-term gains.

One of the main conclusions of the “Retail Investor Research 2023” report was that 75% of the city-state’s virtual asset investors were surveyed with the goal of obtaining short-term returns. 

Furthermore, a majority of the respondents, or 74%, thought that virtual assets were a trend in investing, suggesting that there is a general understanding of their potential for expansion and financial gain.

A further 73% of respondents voiced worries about losing out on investment opportunities, demonstrating the risk of falling behind in this quickly changing industry.

The Hong Kong Polytechnic University’s Department of Applied Social Sciences performed a paper that looked at the actions of virtual asset investors in Hong Kong.

Typical Thought Processes of HK Crypto Investors

The study discovered a number of common cognitive processes, including biases and short cuts, among investors in virtual assets. 

These trends included the propensity to depend on information that is easily accessible, or availability, and the overemphasis on knowledge that has already been learned, or anchoring.

Overconfidence, in which investors overestimated their skills and thought they could outperform the market, was another common tendency.

These patterns were classified into five types: “Own Experience Type,” “Intuition Expansion Type,” “Following the Trend Type,” “Snake Bite Obedient Type,” and “Wishful Thinking Type.”

The survey found that although the respondents showed that they knew a lot about money management, their attitudes and behaviours still needed to be improved.

The Investment Committee stressed the value of approaching investment decision-making from a broad perspective. 

It counselled investors to be watchful and safeguard their money, learn everything there is to know about the features and dangers of investment products, and make thoughtful selections about their investments by periodically evaluating and thinking back on their own actions and mindsets.

Hong Kong Introduces New Laws and Regulations

Hong Kong introduced its new cryptocurrency regulations back in June.

Instead of limiting trading in digital assets to professionals and dealers with at least $1 million in bankable assets, the new rules gives regular investors the opportunity to trade virtual assets.

In keeping with the new rules, the SFC has begun licencing cryptocurrency exchanges.

The first cryptocurrency exchanges in the city to obtain SFC licences are OSL and Hashkey Group.

Additionally, they benefit from the largest online-only bank in Hong Kong, ZA Bank, offering crypto-to-fiat conversion services.

The bank enables cryptocurrency deposits made by users of the trading platforms to be withdrawn in US dollars, Hong Kong dollars, and Chinese yuan.

The SFC received an application for a license to operate a virtual asset trading platform from the cryptocurrency exchange Hong Kong VAEXC (VAEX). 

The JPEX incident, which is said to be the biggest financial scam in Hong Kong’s history, has reportedly further spurred the government of Hong Kong to speed the certification process for cryptocurrency goods in order to encourage industry compliance.

- Published By Team Hongkong Journalist

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