HashKey Capital, the investment arm of Hong Kong-based crypto giant HashKey Group, is allocating a significant portion of its newly launched fund to major altcoins.
In a recent interview with Reuters, Jupiter Zheng, the portfolio manager of the fund, stated that the fund aims to invest less than 50% of its allocation in Bitcoin (BTC) and Ethereum (ETH), the two largest cryptocurrencies.
Zheng added that the fund has already attracted potential clients, primarily high-net-worth individuals and investment firms serving wealthy Asian families. HashKey Capital, which manages over $1 billion in assets, has set a target of raising $100 million for the fund over the next 12 months.
Alongside crypto investments, the fund will also hold a portion of its holdings in cash. Furthermore, the company is developing distribution channels with offshore Chinese financial institutions.
Zheng highlighted that the weakness in the Hong Kong stock market has led investors to seek diversified strategies. He also believes that the price of cryptocurrencies is bottoming out as industry liquidity improves, citing factors such as peaking US interest rates and large US asset managers filing for spot Bitcoin ETFs.
HashKey Capital obtained a “Type 9 asset management license” from Hong Kong’s Securities and Futures Commission last year, enabling it to manage portfolios consisting solely of virtual assets. This license likely paved the way for its latest offering.
Earlier this year, the company closed a $500 million investment round for a fund that focuses on infrastructure, toolings, and applications to promote the mass adoption of blockchain and crypto technologies.
Hong Kong’s government has been actively embracing cryptocurrencies and addressing the market demand for alternative assets. The Securities and Futures Commission (SFC), the country’s main financial regulator, has granted licenses to exchanges under its new crypto licensing regime. This regime allows retail investors in Hong Kong to trade specific “large-cap tokens” on licensed exchanges, subject to certain safeguards.
Hong Kong’s crypto-friendly stance has attracted numerous digital asset firms. The city has hosted around 100 crypto-related conferences this year and has seen over 80 virtual asset-related companies express interest in establishing their presence since the policy statement on virtual assets was released in October 2022.
It is worth noting that Hong Kong’s approach to crypto differs significantly from that of US regulators, who have increased their scrutiny of the industry following the collapse of FTX and other high-profile crypto companies.