Dubai-based exchange Bybit has made its move to expand into the Hong Kong crypto market after recently announcing its plans to set up its central Asian business in the city. Bybit CEO, Ben Zhou, came out in support of this move, citing the "abundance of liquidity" in Hong Kong due to the presence of institutional investors, and they city's well developed capital markets, high financial literacy levels, and knowledgeable investors. The Wall Street Journal also reported on potential concerns by other companies regarding the costs of obtaining and maintaining licenses and the chances of profitability in Hong Kong.

Under the proposed regulations set to come into effect in June, centralized exchanges and retail trading will be limited to only highly liquid and established cryptocurrencies such as Bitcoin and Ethereum, and it is yet to be seen whether exchanges will be allowed to cater only to Hong Kong's relatively small resident population. The city is, however, aiming to attract cryptocurrency companies with the support of stricter enforcement by American officials.

Despite this, lots of well established crypto companies have fled Hong Kong, including Crypto.com, BitMEX, and the now-bankrupt FTX in response to competition from Singapore, the Chinese government's firm stance on cryptocurrencies, and Singapore's slow control of Covid-19. However, by capitalizing on these companies' departures and the increasing American enforcement news reports indicate the city is aiming to give potential companies incentives to establish due to the potential profits made in the market.

The crypto sector is going to be an area of continued growth and a focus of competition between cities and countries of the world, and Hong Kong could be at the forefront of this surge in the coming years. With the potential of establishing operations with the city's strict regulations and the presence of knowledgeable and genuine investors, the cryptocurrency market in Hong Kong could be one to look out for.



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