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Bitcoin’s Rise to Prominence: How Hong Kong is Becoming a Crypto Hub
The recent Bitcoin Asia conference in Hong Kong drew a massive crowd, with over 5,500 attendees, half of whom came from mainland China. This surge in interest is largely attributed to Hong Kong’s supportive policies towards the cryptocurrency industry, including the launch of spot bitcoin and ether exchange-traded funds (ETFs). These ETFs have driven interest in the city, with many bitcoin enthusiasts hoping that Hong Kong’s policies could eventually be an avenue to tapping investors on the mainland, where commercial crypto trading is banned.
Attendees at the Bitcoin Asia conference in Hong Kong
The conference, held at the Kai Tak Cruise Terminal, saw a strong turnout from mainland China, with many attendees expressing hope that Hong Kong’s supportive policies could eventually lead to a way to tap into the mainland market. David Bailey, co-founder and CEO of BTC Inc, which runs the Bitcoin Conference and owns Bitcoin Magazine, estimated that about half of the attendees were from mainland China.
“I think the ETFs were kind of an admission that bitcoin is here to stay,” Bailey said. “There’s no way that Hong Kong just accidentally stumbled into launching an ETF … It wasn’t random.”
The ETFs, which accept in-kind subscriptions, allowing purchases made with bitcoin and ether, have been applauded by cryptocurrency investors. This feature is “very important,” according to Bailey, as crypto investors can use the ETF shares as collateral for loans.
Hong Kong’s ETFs: A Game-Changer for Crypto Investors
The Hong Kong government, which invited the Bitcoin Conference to hold its Asia event in the city, has been very supportive, according to Bailey. The city has already hosted multiple Web3-related events this year, including the WOW Summit and Web3 Festival, as it seeks to bring in more tourism and crypto industry players.
“I think they see bitcoin as a massive opportunity for Hong Kong,” Bailey said.
The Bitcoin Asia conference is much smaller than the US event, which attracts about 30,000 people. However, the turnout in Hong Kong was still much higher than expected, and the company is now looking at options for the event next year.
Bitcoin’s Rise to Prominence: A New Era for Crypto
Some in the industry are hoping to regain a foothold in China, a market that was once a major centre of bitcoin activity. Ben Gagnon, chief mining officer at Canada-based Bitfarms, who used to run mining operations in China, said he hopes Hong Kong can be a “conduit for Chinese investors” to access bitcoin-related technologies.
“What I’m optimistic about is, with these rules and these regulations now in place, Hong Kong actually may find a way to be this bridge for China to bitcoin and to the greater crypto ecosystem in a way that’s more safe, more controlled or regulated,” Gagnon said.
The increasing financialisation of bitcoin has also driven interest in layer 2 solutions, with Chinese developers showcasing new companies building their own layer 2 networks at the conference.
“There is an explosion of innovation happening in bitcoin right now,” Bailey said. “To go from, let’s call it 200 million bitcoiners in the world to 2 billion people in the world, we need to dramatically improve bitcoin scalability.”
Layer 2 Solutions: The Future of Bitcoin Scalability
While optimistic about the new opportunities cropping up in the space, Bailey noted some similarities with previous rounds of bitcoin hype.
“Some of these ideas are going to be famous companies a decade from now; some of these are gonna go to zero,” he said. “So it’s still the wild, wild west but … it’s now the wild west on layer 2 of bitcoin.”