Asian Countries Dominate Chainalysis’ 2023 Global Crypto Adoption Index

The Hong Kong Virtual Asset Consortium (HKVAC), a digital asset group in China's special administrative region, has announced modifications to its core cryptocurrency index, reshuffling the top contenders to the detriment of XRP, the payment solution token developed by Ripple Labs.Photo by Kanchanara on UnsplashSolana takes top 5 slotEffective as of this Friday, HKVAC will replace XRP with Solana (SOL) in its Top 5 Large Cryptocurrency Index, signaling a shift in the composition of its benchmark index. HKVAC is a collaborative effort between Hong Kong-based industry participants such as crypto exchanges and licensed ratings agencies. Its aim is to optimize the risk management capabilities of the crypto sector and in that way, assisting market participants including local regulatory bodies. Crypto exchange platform HTX, previously known as Huobi, became the first member of HKVAC in 2023. It was joined by iPollo, KuCoin, LK Venture, Nano Labs, Purise, Wealthking Investment, G-Rocket Global Accelerator, Hong Kong Data Infinity Technology and others in making up the organization’s membership. The HKVAC's Top 5 index reflects the global cryptocurrency ranking based on market capitalization, maintaining a pulse on the ever-evolving crypto landscape. However, beyond market cap, the digital asset group considers additional factors such as market valuation, investability and liquidity in its index rebalancing decisions. Solana’s growth and progressionSolana, currently ranked as the fifth-largest cryptocurrency, has been making substantial strides in the market. Despite the 2022 collapse of the FTX crypto exchange, which significantly impacted SOL's price, the cryptocurrency has made an impressive recovery. Over the past year Solana has surged by 315%. Presently, SOL boasts a market cap of $41 billion, securing its position in the top echelons of the cryptocurrency market. In contrast, XRP, the ousted cryptocurrency, has experienced a more modest price growth during the same period. As of the latest data, XRP holds the sixth position in the cryptocurrency ranking, with a valuation of $31 billion. The decision to remove XRP from the Top 5 index was met with a 3.9% decline in its value, settling at $0.57. XRP had moved within the Top 5 index in October of last year. It was added to the index alongside SHIB in 2023. At the time of its formation, HKVAC emphasized that market capitalization was one of the primary criteria incorporated within the evaluation, which extends to 30 cryptocurrencies. A re-evaluation is carried out each quarter on the basis of that market cap criterion. Crypto rating reshuffleThe HKVAC's reshuffling extends beyond the Top 5 index, impacting other leading cryptocurrencies. Notable changes include the removal of Filecoin (FIL), Binance USD (BUSD), Maker (MKR), Hedera (HBAR) and TrueUSD (TUSD) from the Global Large Cryptocurrency Index. These have been replaced by Near Protocol (NEAR), Internet Computer (ICP), Immutable (IMX), Optimism (OP) and Injective (INJ). Additionally, Avalanche (AVAX) is set to replace Tron (TRX) on the HKVAC Top 10 Global Large Cryptocurrency Index, effective this Friday. These adjustments come amid Hong Kong's ongoing efforts to bolster the cryptocurrency industry within the region. In December, the financial regulator in Hong Kong signaled its readiness to accept spot crypto exchange-traded funds (ETFs). This move aligns with the United States Securities and Exchange Commission's review of 11 spot bitcoin ETF applications, ultimately approved on Jan. 10.   

Metalpha Technology Holding Limited, based in Hong Kong, has strategically invested in NextGen Digital Venture Limited, aiming to enhance institutional participation in the digital asset space. This move is part of Metalpha's broader effort to bridge the gap between traditional finance (TradFi) and the crypto sphere.Photo by cottonbro studio on PexelsBuilding on Next Generation FundNews of the collaboration broke via a PR Newswire press release published by Metalpha on Monday. The deal builds upon a previous partnership struck by the two companies in April of last year, which resulted in the creation of Next Generation Fund I. This fund is specifically tailored to leverage Grayscale Investments LLC's suite of products, with Grayscale being one of the world’s largest crypto asset managers. Notably, the fund has demonstrated solid performance, surpassing bitcoin's annualized return by 35%. This success has instilled confidence in Metalpha, fostering optimism for the fund's future achievements. NextGen Digital is a Hong Kong-based investment company that aims to provide cryptocurrency and Web3 exposure to institutional clients in the conventional finance realm. Alongside its previous partnership with Metalpha, the firm has invested directly in Web3 startups such as iZumi Finance, a liquidity-as-a-service DeFi protocol. In announcing the Metalpha investment, NextGen founding partner Jason Huang said that the company “is committed to providing secure, compliant cryptocurrency investment opportunities and is always focused on achieving alpha returns.” The company is leveraging its Hong Kong Type 9 license, while aspiring to deliver secure and compliant cryptocurrency investment opportunities. Adrian Wang, president and director of Metalpha Technology Holding, expressed enthusiasm about the partnership, stating: "The launch of the NextGen fund marks the first step for both parties to jointly develop compliant products with generous returns. We look forward to establishing a more solid partnership in the future.” Wang had previously stated that clients of the Next Generation Fund were overseas Chinese institutions. “Some of them are family offices, some of them are public companies,” he stated. On-boarding TradFi investmentPositioned as a notable platform in Asia, NextGen aims to facilitate traditional finance's seamless entry into the realm of cryptocurrencies. This strategic investment by Metalpha underscores the evolving landscape where traditional financial institutions increasingly embrace the potential of digital assets. Metalpha, recognized as one of Asia's leading providers of crypto derivatives solutions, collaborates closely with traditional financial entities, including family offices and crypto mining firms. Holding both Type 4 and Type 9 licenses from the Securities and Futures Commission (SFC) of Hong Kong, Metalpha is authorized to advise on securities and engage in real estate investment scheme management or securities and futures contracts management. In May of last year, Metalpha secured a $5 million investment from leading crypto mining equipment manufacturer, Bitmain. Metalpha counts hybrid crypto exchange GRVT among its portfolio of investments. In September it emerged that it had invested in ParaX, a Web3 super app developed by Parallel Finance. In February 2023, the Litecoin Foundation partnered with Metalpha in an effort to provide environmentally friendly mining techniques to the Litecoin ecosystem.

Bhutan Partners With Bitdeer on Crypto Mining FundSingapore-based Bitcoin mining firm Bitdeer has entered into a partnership with the commercial arm of the Royal Government of Bhutan to jointly develop green digital asset mining operations within the Kingdom of Bhutan.Bitdeer issued a press release on Wednesday to announce the partnership. Druk Holdings and Investments (DHI) acts as the commercial arm of the Royal Government of Bhutan. It was formed pursuant to a Royal Charter in 2007 with the mandate of making investments on behalf of Bhutan while optimizing usage of resources.Driving growthAccording to the information provided, the two companies will “launch the partnership through establishing a closed-end fund with an estimated size of up to US$500 million.” The initiative will see a canvas for funding commencing at the end of this month. Bitdeer’s role in the partnership is that of a general partner while DHI will act as a strategic limited partner.Bitdeer’s Chairman, Jihan Wu, expressed his enthusiasm in gaining access to Bhutan’s zero-emissions hydropower resources through the partnership. Wu stated that the fund represents “a pathway to foster global stakeholder networks that are driving growth and innovation in the technology sector in Bhutan.”Once funding has been raised, that capital will be channeled directly into greenfield operations on the ground in Bhutan. That encompasses the construction of data centers and what the joint parties to the initiative describe as “the acquisition of cutting edge technology.”Photo by Singkham on PexelsDigital transformationUjjwal Deep Dahal, CEO of DHI, stated: “The partnership with Bitdeer to launch a carbon-free digital asset mining data center represents an investment in a more connected and sustainable domestic economy, helping ensure we are at the forefront of global innovation.”Bhutan is executing on a plan to accelerate digital transformation and economic diversification by exploiting opportunities in emerging sectors. Further evidence that this is part of a broader longer term strategy emerged recently. Dahal had told a local Bhutanese publication that DHI had been engaged in bitcoin mining on behalf of the Kingdom since bitcoin had a unit price of $5,000. In that interview, Dahal acknowledged that the involvement from the outset of its bitcoin mining activities was part of a broader, long term strategy.Bitdeer’s Asia expansionAlthough Bitdeer is Singapore-based, its operations up until this point have been focused on facilities located in Northern Europe and North America. According to this latest announcement, the bitcoin miner sees this partnership as a “crucial expansion into Asia for Bitdeer.” A shift in geographical focus may be well timed by Bitdeer as it emerged today that President Joe Biden in the United States is considering the imposition of a 30% tax on crypto mining.The bitcoin miner completed a long overdue special purpose acquisition company (SPAC) merger with Blue Safari Group last month. As part of that process, it listed on the Nasdaq. That public listing process has been a baptism of fire for the company as shortly afterwards, the company traded down 30% from the point of its initial listing.A corporate filing made by the company with the Securities and Exchange Commission (SEC) provides more detail with regard to Bitdeer’s plans in Bhutan. “We expect to generate 100 MW out of the 550 MW power supply from Bhutan, where the construction of a mining data center is expected to begin in the second quarter of 2023 and complete in the third quarter of 2023,” the filing states.