Bitcoin Asia in Hong Kong attracts major interest from mainland as attendees look to top market where crypto is banned

Bitcoin Asia in Hong Kong attracts major interest from mainland as attendees look to top market where crypto is banned

The Bitcoin Asia conference in Hong Kong this year drew a strong crowd from mainland China, according to organisers, but it is a different, smaller mix of people than the Bitcoin Conference is used to seeing in the US.

The conference, held on Thursday and Friday, had about 5,500 attendees confirmed ahead of the show, not accounting for door registrations, said David Bailey, co-founder and CEO of BTC Inc, which runs the Bitcoin Conference and owns Bitcoin Magazine. Without having data at hand, Bailey estimated that about half of the attendees were from mainland China, where interest in the conference was strong owing to Hong Kong’s recent launch of spot bitcoin and ether exchange-traded funds (ETFs) and an explosion in development of layer 2 projects.

Many bitcoin enthusiasts also flew in from other countries for the event. Some in the community expressed hope that the city’s supportive policies for the cryptocurrency industry could eventually be an avenue to tapping investors on the mainland, where commercial crypto trading is banned. Several attendees also suggested that they see Hong Kong’s push to become a crypto hub as tacit support from Beijing.

“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.”

David Bailey, co-founder and CEO of BTC Inc, gives opening remarks at Bitcoin Asia in Hong Kong on May 9, 2024. Photo: Matt Haldane

Cryptocurrency investors also applauded Hong Kong’s new ETFs, as they accept in-kind subscriptions, which allows purchases made with bitcoin and ether. This feature is “very important”, according to Bailey, because crypto investors can use the ETF shares as collaterals for loans. Managers of Hong Kong’s crypto ETFs Harvest Global and ChinaAMC have both said that they are working on pushing ahead with the collateralisation of their ETF products in the city.

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.

Bitcoin Asia is much smaller than the US event, which was previously held in Miami, Florida, and this year will be in Nashville, Tennessee. That conference attracts about 30,000 people, Bailey said. This is the first bitcoin-focused conference of its size in Asia in several years.

Alex McShane, director of programming for the Bitcoin Conference, said the turnout in Hong Kong was still much higher than he expected. The company is now looking at options for the event next year. Bailey said the company is already in discussions with Hong Kong for returning to the city, with eyes on the coveted Convention and Exhibition Centre in Wan Chai. The event this year was held at the Kai Tak Cruise Terminal.

Tokyo and Singapore are also options for future Asia events, according to McShane.

Some in the industry are hoping to regain a foothold in China, a market that was once a major centre of bitcoin activity. That evaporated almost overnight in 2021, when mainland authorities pushed out nearly all bitcoin mining activity, although much of that activity has since returned, albeit quietly.

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 – something he sees as possibly mitigating the impact of the real estate crash and stock market slump.

“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.

“I hope that there’s going to be more pathways into mainland China,” he added.

Besides the increasing financialisation of bitcoin, the asset’s price surge this year has also driven interest in layer 2 solutions. A layer 2 on a blockchain is a secondary network meant to help with scalability and efficiency, such as by offloading calculations to a secondary chain that is not as congested.

Chinese developers were spread across the main floor of Bitcoin Asia touting new companies building their own layer 2 networks.

“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.”

Still, while optimistic about the new opportunities cropping up in the space, he 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.”



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