Hong Kong has 24% cryptocurrency penetration rate currently, ranking third in APAC. This means one in four Hong Kongers owns cryptocurrency as part of his assets. Indonesia ranks at the top at 41%, followed by 30% in Singapore. The data is obtained by a survey conducted on around 30,000 people across 20 countries globally by a cryptocurrency platform during November last year to February.

Around 80% of survey participants who hold cryptocurrencies believes in the long term investment potential. Despite their volatile prices, with Bitcoin retraced from the record high of $69k, around half of the local participants purchased cryptos last year for the first time, higher than the 45% APAC’s average.
Survey reveals that regional factors play vital roles in penetration rate. Regulatory authorities in Hong Kong and Singapore hold relatively open views on the cryptos, which increase the investment appetite of local retail investors. In Indonesia and India, currency depreciation boosts the purchasing demand and adoption rate.

Cryptos are considered as high risk and speculative investments. Although opportunities abound, as Central African Republic and El Salvador adopted bitcoin as legal currency, International Monetary Fund has raised concerns on the increased risk on financial system’s trustworthiness and stability. Investors are suggested not to focus on price appreciation, and should be aware of the following 3 risks before making investment decisions:

1. Volatile prices
Crypto prices are volatile and are largely influenced by policies in different countries. For instance, China viewed Initial Coin Offering as illegal in 2017, causing plunges across the crypto markets. Investors should ensure they have sufficient capabilities in riding through the volatilities with proper risk assessments before investment.

2. Digital goods
Cryptos are a form of digital currency. Unlike the traditional currencies, there is no banks, governments, issuers, and physically backed assets. It is treated as digital goods in Hong Kong.

3. Exchange platform risks
Crypto exchanges are private companies. It is probable that they are located overseas and are not subject to local laws. If the exchanges shut down or stop operating, investors may lose the invested cryptos.