Author: HashKey Exchange
In February, after Bitcoin broke through the $60,000 mark, there was no expected pullback, but instead a steady rise. On March 5th, Bitcoin broke the $68,000 mark (now reported at $66,800), approaching its all-time high, with a monthly increase of over 50%.
According to 8marketcap data, Bitcoin's market value ($1.349 trillion) has surpassed that of silver ($1.346 trillion), making it the eighth largest asset by market value globally.
Cryptocurrency exchanges have seen increased trading volume and capital inflows due to the overall rise in cryptocurrency prices. In February, the platform asset accumulation of HashKey Exchange, a licensed virtual asset exchange in Hong Kong, surged by 40% compared to January, with BTC weekly trading volume exceeding HK$15 billion at one point.
As Bitcoin continues to rise, its unrealized gains outperformed major global stock markets and asset classes during the same period.
According to HashKey's latest February monthly report, as of the end of February, the average holding period for BTC by HashKey clients was 61 days, with unrealized gains exceeding 40%.
What forces are driving the overall rise that started in February? Will the cryptocurrency market experience a significant pullback or continue to rise? What are the key trading data to watch? Based on the monthly report released by HashKey Exchange, it reviewed the characteristics of the cryptocurrency market in February and the important events to watch in the market through changes in core data on its exchange and industry insights in Hong Kong and other regions.
Bitcoin's monthly increase exceeds 50%, HashKey BTC weekly trading volume exceeds HK$15 billion
Currently in Hong Kong, only HashKey and OSL have virtual currency retail business licenses. Twenty-four related entities including OKX, Bybit, Futu Securities, and Tiger Brokers have submitted applications. On February 29th, the Hong Kong Securities and Futures Commission's website stopped accepting applications for virtual asset platform licenses, requiring cryptocurrency exchanges operating in Hong Kong without a license to cease operations in the region by May 31st.
As a licensed virtual asset exchange in Hong Kong, HashKey Exchange is currently ranked in the top 15 on CoinGecko and is also the largest licensed virtual asset exchange in Hong Kong. Since its launch on August 29, 2023, HashKey Exchange has accumulated a total trading volume of over HK$350 billion by the end of February this year.
With the cryptocurrency market entering a bull market, HashKey Exchange has seen a significant increase in platform trading data after nearly six months of operation. In February, the platform's asset accumulation surged by 40% compared to January, and the monthly trading volume reached HK$31.8 billion, with BTC weekly trading volume exceeding HK$15 billion at one point.
In addition to the overall growth in trading data, HashKey Exchange's institutional business made various breakthroughs in February.
In terms of stablecoins, HashKey Exchange supported the upcoming Hong Kong dollar stablecoin HKDR by Circle Technology and announced a cooperation intention with Circle Technology and Allinpay International regarding the Hong Kong dollar stablecoin business, covering the use of stablecoins in online and offline trading scenarios.
In terms of compliance, HashKey OTC obtained approval from the Monetary Authority of Singapore, marking an important milestone for HashKey on its path to comprehensive compliance.
In terms of brokerage cooperation, HashKey disclosed a cooperation with licensed institution Hua Liang Securities in Hong Kong in February. Hua Liang Securities will officially launch trading accounts on HashKey Exchange.
According to HashKey Exchange's February monthly report, as of now, HashKey Exchange's partners include 10 brokerage institutions such as Hua Liang Securities, Huaxia Fund (Hong Kong), and Pandu Financial, as well as 6 Hong Kong-listed companies including Shengyang Group, Tiger Media, and Blueport Interactive.
Users' BTC average holding unrealized gains exceed 40%, BRC20 is the investment focus of high-net-worth individuals in Hong Kong
As Bitcoin continues to rise, the unrealized gains of Bitcoin assets outperformed major global stock markets and asset classes during the same period.
According to HashKey's latest monthly report, as of the end of February, the average holding period for BTC by HashKey clients was 61 days, with an average holding price of approximately $44.214 million and unrealized gains exceeding 40%. In contrast, the Nikkei Index, S&P 500, and spot gold rose by 19.89%, 8.31%, and 1.8% respectively, while the Hang Seng Index fell by 1.19%.
The surge in Bitcoin also led to a general rise in the altcoin sector, with the Bitcoin ecosystem and BRC20 tokens performing remarkably well. Ordi saw a monthly increase of over 50%, and Sats saw a monthly increase of over 60%. According to HashKey's observations, the Bitcoin ecosystem and BRC20 tokens have become the investment focus of high-net-worth individuals in Hong Kong.
On February 27th, HashKey, together with institutions such as Animoca Brands, InvestHK, DigiFT, and EmergentX, held a roundtable meeting. Over 60 representatives from family offices, professional investors, and the Web3 industry expressed great interest in the Bitcoin ecosystem and BRC20 as an important investment direction.
What factors drove the significant rise of Bitcoin in February, and will there be a pullback or continued ascent?
According to HashKey Exchange's analysis, the cumulative net inflow of Bitcoin spot ETFs exceeded $6 billion, driving the rapid rise of Bitcoin in February.
After March, major events affecting the cryptocurrency market include the Cancun upgrade, the latest interest rate decision by the Federal Reserve, and the Hong Kong Web3 Carnival. HashKey Exchange believes that the macro environment and liquidity in the market will continue to be favorable.
In terms of interest rate cuts, it is expected that the Federal Reserve will resume interest rate cuts in the middle of the year, with increased interest payments on $34 trillion of U.S. government debt and continued loose U.S. dollar liquidity. As for the U.S. presidential election, it is expected that inflation data and non-farm employment data will not deteriorate significantly in the current situation.
In terms of capital inflows, after the launch of Hong Kong ETFs, a large amount of funds are expected to enter the Asian market, while large U.S. institutions are waiting for the complete release of risks after the interest rate cut, indicating continued upward potential for Bitcoin purchasing power.
In addition, with the success of Bitcoin spot ETFs, the market continues to focus on the launch of Ethereum spot ETFs, which is expected to be advanced to May, attracting a large amount of traditional asset allocation.
In terms of retail investor sentiment, boosted by the Bitcoin halving and Ethereum upgrade, cryptocurrency investment remains in a state of strong risk preference. In the upcoming volatility, cryptocurrency users need to seize the opportunity and manage risks effectively.
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