Exclusive: Executive President of Hashkey Group, Michel Lee shares his top digital asset trends and opportunities to watch in 2021.

Beyond Bitcoin: Exploring new instruments and opportunities

Digital assets has more than just digital currencies. Custody, trading platforms and security solutions are other investment opportunities for institutional investors in digital assets. Bitcoin high prices are a red herring – this is akin to currency speculation in the spotlight but there is lots of other innovation going on. Investors in fact should look out for interesting tokenization applications. Look at the example of the $600 million luxury hotel in the Mayfair district of London that was tokenized by a consortium of Gulf families. Security tokens, which are also referred to as digital securities have already seen success with real estate, equity, investment funds and even fine art. This opens up huge new possibilities for innovation, technology and investment strategies.

GBA: Strategic new role in creating a hub for digital asset management

The Greater Bay Area (GBA) integration will gain significant traction in 2021, and Hong Kong, as an international financial centre, plays a critical role in creating a  global hub for digital asset management, trading and tokenization. China announced its plan in 2020 to launch the test for its digital yuan, digital version of China’s physical currency, in Hong Kong because it is the “most open and international city” in the GBA. Once the regulatory framework is established in Hong Kong, it will provide an environment to nurture the ecosystem throughout the GBA.

New Normal: Acceptance of payments in virtual currency

This will pull through entire digital asset sector. Companies like PayPal have begun to support cryptocurrencies for the first time, allowing any PayPal account holder to store, buy, and sell popular virtual currencies starting later this year. The market for cryptocurrencies and non-fungible tokens is surging and we can see an exciting new dynamic coming into play as the digital assets world expands more than ever before.

Digital Acceptance Increasing: Institutional Investors more favourable than ever before

From our field experience, interviews and research, we know that institutional investors have strong interest in digital assets. The 2020 Fidelity Digital Assets survey showed that 80% of institutional investors were favorable to digital assets.

The regulatory clarity for virtual asset trading platforms will help to protect investors and ensure safe asset custody and market integrity. We believe these will help to foster an ecosystem in digital asset industries in Hong Kong and Asia.