Tech
Bitcoin Asia in Hong Kong attracts huge interest from the mainland as participants look to the main market where cryptocurrencies are banned
“I think ETFs are kind of an admission that bitcoin is here to stay,” Bailey said. “There is no way that Hong Kong just randomly stumbled upon the launch of an ETF… It was not accidental.”
David Bailey, co-founder and CEO of BTC Inc, delivers the keynote speech at Bitcoin Asia in Hong Kong on May 9, 2024. Photo: Matt Haldane
Cryptocurrency investors have also applauded Hong Kong’s new ETFs, as they accept in-kind subscriptions, which allow purchases made with bitcoin and ether. This feature is “very important,” according to Bailey, because cryptocurrency investors can use ETF shares as collateral for loans. Hong Kong crypto ETF managers Harvest Global and ChinaAMC have both said they are working to advance collateralisation of their ETF products in the city.
According to Bailey, the Hong Kong government, which invited the Bitcoin Conference to hold its Asian event in the city, was very supportive. The city has already hosted numerous Web3-related events this year, including the WOW Summit and the Web3 Festival, in an effort to involve more operators from the tourism and cryptocurrency sectors.
“I think they see bitcoin as a huge opportunity for Hong Kong,” Bailey said.
Bitcoin Asia is much smaller than the US event, which was previously held in Miami, Florida, and this year will take place in Nashville, Tennessee. That conference draws about 30,000 people, Bailey said. This is the first conference of this size in Asia focused on bitcoin in several years.
Alex McShane, programming director of the Bitcoin Conference, said turnout in Hong Kong was still much higher than he expected. The company is now reviewing options for next year’s event. Bailey said the company is already in discussions with Hong Kong about returning to the city, with its sights set on the coveted Wan Chai Convention and Exhibition Centre. This year’s event was held at the Kai Tak Cruise Terminal.
According to McShane, Tokyo and Singapore are also options for future Asian events.
Some in the industry are hoping to regain a foothold in China, a market that was once a major center of bitcoin activity. However, that evaporated almost overnight in 2021, when mainland authorities shut down nearly all bitcoin mining activities much of that activity has since returnedeven if in silence.
Ben Gagnon, chief mining officer of Canada-based Bitfarms, which ran mining operations in China, said he hoped Hong Kong could be a “conduit for Chinese investors” to access bitcoin-related technologies – something he believes could mitigate the impact of Bitfarms. the collapse of the real estate sector and the collapse of the stock market.
“What I’m optimistic about is that, with these rules and regulations now in place, Hong Kong may actually find a way to be a bridge between China and Bitcoin and the broader crypto ecosystem in a way that is safer, more controlled or more efficient.” regulated,” Gagnon said.
“I hope there are more access routes to mainland China,” he added.
In addition to the increasing financialization of bitcoin, the asset’s surge in prices this year has also spurred interest in layer 2 solutions. A layer 2 on a blockchain is a secondary network meant to help with scalability and efficiency, for example example by offloading the calculations to a secondary chain that is not as congested.
Chinese developers were scattered across the main floor of Bitcoin Asia promoting new companies building their own Layer 2 networks.
“There is an explosion of innovation happening in bitcoin right now,” Bailey said. “To go from, say, 200 million bitcoiners in the world to 2 billion people in the world, we need to significantly improve the scalability of bitcoin.”
However, while he is optimistic about new opportunities arising in the space, he noted some similarities to previous bitcoin hype cycles.
“Some of these ideas will become famous companies in a decade; some of these will go to zero,” she said. “So it’s still the wild west, but…now it’s the wild west on Bitcoin layer 2.”