Author: momo, ChainCatcher

“Hong Kong's first cryptocurrency stock” HashKey (stock code: 03887) officially ended its subscription at noon on December 12 and is scheduled to be listed on December 17.

Since passing the Hong Kong Stock Exchange hearing and the public offering of the prospectus, the market has shown mixed reactions to HashKey's IPO.

On one hand, HashKey's continuous massive losses and high-cost operating structure have raised concerns about its financial health, and its platform token HSK has been criticized for inefficiency and sacrificing community interests.

On the other hand, the subscription market for HashKey's IPO remains extremely hot. The latest data shows that the total amount of subscription funds borrowed through brokerage channels (margin financing) reached HKD 50.6 billion by the end of the subscription on the 12th. With a public offering fundraising amount of HKD 167 million (approximately HKD 170 million), the oversubscription rate reached 301.6 times.

Additionally, HashKey's IPO has attracted nine well-known cornerstone investors, including UBS, Fidelity, and CDH Investments, with a total subscription of approximately HKD 590 million in shares.

Despite the ongoing pessimism, investors are still betting real money on HashKey as a "rare value of a major licensed compliant platform in Hong Kong." As a slice of the development of Hong Kong's virtual asset market, the hot subscription for HashKey also reflects the market's policy sentiment, which is optimistic about Hong Kong's acceleration in building a "global virtual asset center."

High Investment Period ≠ Poor Management

The business logic that pessimists should understand: high investment period ≠ poor management. According to the prospectus, from 2022 to 2024, HashKey's cumulative adjusted net loss is approximately HKD 1.57 billion; the loss in 2024 is expected to nearly double year-on-year to HKD 1.19 billion.

HashKey explains in the prospectus that the trading platform was still in the early development stage in 2022, with limited revenue contribution from the sector, and the fair value loss of digital assets also affected the financial performance in 2022. As the trading system, compliance framework, and institutional client access processes gradually improved, the company fully launched its business in 2023, with revenue from trading facilitation services reaching HKD 518 million in 2024, compared to a loss of HKD 15 million in 2022, reflecting strong business expansion momentum and the effectiveness of early strategic investments.

Since 2022, HashKey has been in a high investment period, and continuous losses do not equate to poor management. Early-stage continuous losses are actually quite common among platform-type enterprises; for example, Amazon experienced nearly 20 years of losses. When Amazon went public, Bezos stated in his letter to shareholders that "everything must be planned for the long term."

Moreover, the high investment in compliant financial infrastructure is almost inevitable in the early stages of development. For instance, Coinbase, which is strategically similar to HashKey, has firmly pursued a compliant path since its establishment in 2012. It has gradually obtained money transmission licenses in 46 states/regions in the U.S. since 2013, allowing it to operate legally in all 50 states. It is one of the few exchanges in the U.S. to obtain state licenses, FinCEN registration, and a New York trust license, incurring significant compliance costs each year. Coinbase invested far more than its revenue for several consecutive years before going public, and despite accumulating losses of about USD 500-600 million before its IPO, it was still accepted by Wall Street.

For large institutions and mainstream users, Coinbase is often the first choice or even the only option. Due to regulatory restrictions in the U.S., many traditional funds can only use licensed trading platforms, allowing Coinbase to capture a natural market share, and the barriers formed by its brand and compliance are difficult for latecomers to replicate quickly and at low cost.

For companies like Coinbase and HashKey, a very high level of security, risk control systems, compliance systems, and custody capabilities are required, and a large amount of fixed costs must be invested in advance.

Where Does HashKey's High Investment Go?

HashKey's high investment, in addition to compliance costs, also includes significant expenditures on technology and research and development. In 2024, HashKey's R&D expenditure is expected to reach HKD 580 million, accounting for 77.2% of its revenue. This includes the development of core trading systems, security risk control systems, self-developed blockchain (HashKey Chain), and tokenization of real-world assets (RWA).

Specifically, HashKey's service system encompasses asset custody, OTC services, institutional services, HashKey Chain public chain, and RWA issuance and management, among others. Its ecological layout can be roughly summarized as:

• Trading Layer (HashKey Exchange, HashKey Global): Provides compliant deposit and withdrawal channels for retail and institutional clients, with a cumulative trading volume exceeding HKD 13 trillion, attracting institutional funds and holding a 75% market share in Hong Kong.

• On-chain Layer (HashKey Chain): A compliant L2 public chain focusing on RWA tokenization and stablecoin issuance, bridging on-chain and off-chain, with HSK serving as a governance token to provide continuous incentives for the on-chain ecosystem.

• Asset Management Layer (HashKey Capital): On one hand, it provides custody services, with assets under management exceeding HKD 8 billion. This year, it also launched the DAT (Digital Asset Treasury) ecological fund, with an initial fundraising scale of over USD 500 million, focusing on initiating and participating in the ETH and BTC ecosystems. Additionally, HashKey Capital, as a venture capital department, conducts early-stage ecological investments, with a portfolio covering over 600 projects globally.

Furthermore, HashKey's ecological layout also includes HashKey OTC, which provides compliant digital asset OTC services, HashKey Cloud, a Web3 infrastructure provider, and HashKey Tokenisation, a tokenization service agency.

Through this IPO, HashKey aims to further improve the "compliant ecological closed loop of Hong Kong's virtual asset market," providing a "rare compliant cryptocurrency service entry" for Asia.

HashKey's Positioning Value: Based in Hong Kong, Radiating Across Asia

HashKey's core value has long surpassed that of a "compliant exchange" itself; it plays a strategic interface role for Hong Kong and even the entire Asia in the next round of financial system upgrades.

First is the unique East-West passage value. Hong Kong, as a bridge between Eastern and Western financial systems, has a mature regulatory system, international financial infrastructure, and a long-established institutional synergy advantage with the mainland Chinese market. HashKey serves as a "bridge between traditional finance and the Web3 world." For international institutions, it is a compliant entry point into the Chinese and Asian markets.

Secondly, in terms of leadership in the institutional market, HashKey is the largest regional onshore platform in Asia based on trading volume in 2024. Beyond trading business, in terms of staked assets, HashKey is also the largest on-chain service provider in Asia and the largest digital asset management institution based on assets under management.

Cryptocurrency is transitioning from a speculative asset to a corporate financial tool, marking a significant global shift.

As the "Asian version of Coinbase," HashKey has almost become the only standard solution currently available in the process of Asian institutions accelerating their on-chain activities. The licensing system in Hong Kong has very high thresholds, with governance, risk control, custody, and anti-money laundering processes all approaching international financial standards. This regulatory intensity directly creates a quasi-monopolistic barrier. In the current context of a relatively sluggish Asian cryptocurrency startup and innovation ecosystem, HashKey has effectively become the ceiling for institutional business in Asia.

As Hong Kong's first cryptocurrency stock, HashKey's positioning value has already surpassed its business value.

HashKey is currently positioned at the forefront of Hong Kong's efforts to build a "global virtual asset center," as well as at the intersection of East and West, traditional finance and virtual assets. The Asian regulatory and capital markets need a Coinbase-level model; HashKey's listing represents a "value pricing" for the future Web3 infrastructure in the regional market. The IPO process of HashKey further reflects how Asia defines its own rules, attracts global capital, and seizes development initiative in the new financial era.

Therefore, despite the bleak financial situation in the prospectus, HashKey's IPO can still achieve over 200 times subscription, primarily because investors are paying for its positioning value. Some investors even stated that for a symbol-level listing of an era, whether it breaks or not, or whether it makes money or not, is not that important; participating in the subscription feels more like paying a few thousand dollars for the cost of observing a historical milestone.

Conclusion: During the Low Tide, Don't Easily Sing the Blues for the Asian Crypto Ecosystem

When examining HashKey's IPO, focusing solely on the loss figures can easily overlook the larger structural logic behind it. HashKey is not a short-cycle platform that relies on trading volume for profit; rather, it is building the foundation for the next generation of digital finance in Asia using heavy assets and slow variables.

Its positioning value in the Hong Kong and Asian financial systems far exceeds its current business value. This is why, despite ongoing loss controversies, criticism of its platform token, and overwhelming doubts, HashKey's IPO still achieved over a hundred times subscription. Capital is not unable to understand its financial reports; rather, it chooses to bet real money on the position it occupies in this era. HashKey is standing at this intersection.

Despite its imperfections, HashKey remains a very rare entity for the entire Asian crypto ecosystem.

The Asian cryptocurrency startup and technological innovation ecosystem is currently in a low tide, lacking high-quality, globally competitive fintech infrastructure companies. If even a company like HashKey, which is building compliant pathways, infrastructure, and institutional interfaces, is being criticized, it effectively undermines the ceiling for institutional business across Asia, which is detrimental to the industry's development.

Hong Kong is still "feeling its way across the river" in the virtual asset and Web3 fields. As the leader in this experimental field, the market might benefit from more patience and less pessimism; perhaps we are just a step away from the next explosive window.

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