Jupiter Zheng: «TradFi Companies Will Catch Up in Crypto»
Clients are increasingly interested in crypto services but traditional financial institutions are still being cautious and only adopting gradually. If things go well, this coming four-year cycle could be a turning point, according to HashKey’s Jupiter Zheng.
A growing number of companies in traditional finance – also known as TradFi – are increasingly interested in crypto. According to a recent Broadridge survey, 64 percent of firms globally are making moderate to large crypto investments, including 72 percent in Asia.
Within the banking industry, private banks have been one of the relatively earlier adopters. In an interview with finews.asia, Jupiter Zheng, partner, liquid funds and research at HashKey Capital, a Hong Kong-based digital asset and blockchain firm, spoke about client interest.
NextGen Demand
HashKey Group provides a comprehensive suite of digital asset services including trading, advisory, custody and more. HashKey Capital is the group’s asset management firm and it offers active and passive funds invested in crypto assets.
«Especially the next generation clients, they have a greater interest in crypto. They are asking their parents if they can have a small sum to engage in crypto businesses or allocate to crypto assets,» Zheng observed. «HashKey provides B2B2C (business-to-business-to-customer) services to private banks.»
Institutional Adoption Still Gradual
However, Zheng believes there is still relatively limited institutional adoption and it will take some time before many TradFi companies consider offering crypto services directly. And this is not due to a shortage of demand.
«They are reluctant not because of lacking interest but because of regulatory and compliance issues,» he said. «Actually from the frontline people – especially salespeople – they want more services and more products.»
Next Four-Year Cycle
Meanwhile, decentralized finance (DeFi) companies, such as crypto banks, are rapidly establishing their market positions and focusing on segments like unbanked crypto clients by leveraging their expertise anti-money laundering or know-your-client capabilities in digital assets. While some believe that the future of crypto finance will be dominated by such players, Zheng is not counting out traditional firms.
«I think the TradFi companies will catch up in crypto,» he said. «The next four-year cycle for Bitcoin will be a perfect timing for the massive institutional adoption.»
Pro-Crypto President
Under US President Donald Trump, there are regulatory tailwinds underway. The US Securities and Exchange Commission is approving more and more crypto-related exchange-traded funds while dropping major lawsuits. Clarity on the rules for stablecoins is improving. In addition, Trump has also announced the establishment of a strategic Bitcoin reserve and digital asset stockpile.
«I think these policy changes will support other countries to rethink their policies and regulations regarding cryptos,» commented Zheng. «If Trump implements his campaign pledge, Singapore and Hong Kong would probably be the first Asian jurisdictions to replicate such a policy change, though with their own unique approaches based on evolving local regulatory frameworks.»
Bitcoin Versus Gold
Aside from business-friendly regulations, Zheng highlights that another key driver to further accelerate adoption will rely on market performance, most notably Bitcoin. After peaking at above $100,000 earlier this year, the blue chip token has since slid and moved sideways around the $85,000 level.
«Bitcoin has not proven its safe haven features. We see that when the market has been in correction, Bitcoin has not performed well compared to gold. So this will be not a good sign for other governments to think about Bitcoin reserve adoption schemes,» Zheng noted.
