HashKey Shares Fall 3% in Disappointing Hong Kong Market Debut Despite $200M Success

Summary: HashKey Holdings experienced a 3% drop in its share price upon debuting in Hong Kong, despite a successful $206 million initial public offering. This listing marks a significant moment for the digital asset industry in Hong Kong as the city seeks to establish itself as a leading global crypto hub.

Key Takeaways

HashKey Holdings' shares fell by 3% during its initial public offering in Hong Kong, closing at HK$6.51.
The company raised $206 million, representing the first public listing for a digital asset firm in Hong Kong.
Strong demand came from investors, but overall market challenges persist.
HashKey operates the largest licensed virtual asset trading platform in Hong Kong.
The city's crypto policies contrast sharply with those of mainland China, which has banned crypto trading.

HashKey Shares Drop 3% in Disappointing Hong Kong Debut Despite $200M Raise

HashKey’s Uneven Start in the Hong Kong Market

HashKey Holdings witnessed a 3% decline in its stock price on Wednesday during its much-anticipated trading debut in Hong Kong, closing at HK$6.51 after being priced at HK$6.68, close to the upper end of its marketed range, as reported by CNBC.

The cryptocurrency exchange successfully raised $206 million through its initial public offering (IPO), marking a landmark event as the first public listing by a digital asset company in the region, even as Bitcoin plummeted 36% from its all-time high above $126,000 reached in October.

This disappointing performance occurred despite excessive investor interest, with institutional subscriptions surpassing available shares by 5.5 times, while retail investor subscriptions exceeded the offering by an astonishing 394 times. Prominent cornerstone investors, including Fidelity, UBS, CDH Investments, and Cithara Fund, participated in the offering, with JPMorgan and Guotai Haitong serving as joint bookrunners for the IPO.

Hong Kong’s Ambitious Crypto Hub Initiative Faces Market Challenges

Established in 2018, HashKey operates the largest licensed virtual asset trading platform in Hong Kong and was among the first to receive approval under the territory's digital asset regulatory framework introduced in 2022. The platform captures over 75% of the onshore digital asset trading volume in Hong Kong, offering services such as exchange operations, over-the-counter trading, staking, tokenization, and asset management for both retail and institutional clients.

Despite the volatile market conditions, CEO Xiao Feng expressed optimism about the future during an interview with Reuters. He stated, “My confidence is only growing stronger and I am more optimistic than 10 years ago because there’s more regulation and compliance guidelines for us to follow which will allow the industry to grow further,” during the listing ceremony.

For the first half of 2025, HashKey reported a trading volume of HK$1.7 trillion, although its revenue fell by 26% year-over-year to HK$284 million during that same period. The company also reported a loss of HK$506.7 million, which was an improvement from the HK$772.6 million loss of the previous year, attributed to significant investments in compliance and market expansion.

Contrast Between Hong Kong's Digital Asset Approach and Mainland China's Ban

Hong Kong's proactive stance on cryptocurrencies stands in stark contrast to the policies of mainland China, which imposed a ban on crypto trading in 2021 and has reiterated warnings regarding virtual assets. This year, Hong Kong introduced a licensing system for stablecoins and is exploring the possibility of linking local exchanges with global platforms, aiming to become a testing ground for regulated digital asset adoption.

During the listing, Xiao highlighted that Hong Kong's policies on digital assets differ significantly from the strict regulations in Beijing, noting that the mainland government's efforts were primarily aimed at combating pyramid schemes and stablecoin fraud. “Hong Kong continues to promote policies regarding digital assets, and we have benefited from that,” he said. “We should firmly adhere to ‘one country’, but wisely take advantage of ‘two systems.’“

CFO Eric Zhu expressed belief that the Asian market is set to align more closely with U.S. levels of cryptocurrency penetration. “We are confident that the penetration rate in Hong Kong, in the Asian market, is going to catch up with what happens in the U.S,” he told CNBC.

The proceeds from the IPO will be utilized for technology upgrades, partnerships for market expansion, and enhanced risk management systems. HashKey intends to focus on cash flow over profitability in the short term while continuing to invest as the sector evolves.

The listing comes at a challenging time for crypto equities globally. For instance, stablecoin provider Circle has lost 70% of its value since peaking in June, while cryptocurrency exchanges like Bullish and Gemini have seen declines exceeding 30% and 60%, respectively, since their summer launches. Bitcoin itself has fallen approximately 30% from its October highs amid heightened geopolitical tensions and concerns in broader markets.

Hong Kong’s Financial Secretary Paul Chan attended the listing event, demonstrating the city’s official support for its digital asset initiatives. The debut of HashKey contributed to Hong Kong’s strongest IPO year since 2021, with more than $34 billion raised from new listings through December, according to data from Reuters, reclaiming its position as a top global IPO destination, overtaking U.S. exchanges for the first time since 2019.