True Potential of Asian Crypto ETFs Yet to Be Realized

Lion Group Holding Ltd (LGHL), a Nasdaq-listed financial services firm that provides an all-in-one platform for traders, has announced that it has secured $600 million to fund a Hyperliquid (HYPE) treasury. In a press release published by PR Newswire on behalf of the firm on June 18, the company outlined that a $600 million funding facility has been put in place by ATW Partners, a New York-headquartered investment firm that manages a number of private equity funds. Global investment bank Chardan Capital acted as the placement agent in facilitating the funding, with the first closing of $10.6 million, as per the subscription agreement.Photo by Towfiqu barbhuiya on UnsplashCorporate treasury strategyLion Group will use that money to launch a new corporate treasury strategy built around Hyperliquid’s HYPE token. Hyperliquid is a decentralized exchange (DEX) which was created by Hyperliquid Labs, a startup founded by Jeff Yan.  The HYPE token is the native token of the Hyperliquid platform. It’s used to secure the network through staking and for project governance. The token is also used to provide transaction incentives, while the Hyperliquid platform buys back HYPE tokens using trading fee revenues. Lion Group’s platform offers its users access to contract-for-difference (CFD) trading, total return swap (TRS) trading, over-the-counter (OTC) stock options trading, while also acting as a futures and securities brokerage. Up until 2022, the firm was based in Hong Kong, opting to relocate to Singapore at that point. Primarily, the company serves corporate clients, individual professional investors and retail investors located in China and throughout the Southeast Asian region. Future of trading is on-chainIn explaining its rationale for pursuing a HYPE treasury strategy, the company’s CEO, Wilson Wang, stated: “Hyperliquid represents a natural extension of LGHL's existing derivatives business into decentralized markets, and reflects our conviction that decentralized on-chain execution is the future of trading." Going forward, the company will pursue a strategic accumulation of HYPE, with the token serving as the firm’s primary reserve asset. In addition to HYPE, Lion Group outlined that it may also allocate funds to purchase Solana (SOL) and Sui (SUI), with these tokens to be staked and custodied with institutional-grade digital asset custodian, BitGo. Lion Group asserted that both of these assets would form “key pillars” of a treasury strategy “focused on execution-first protocols.” Wang added that the company views “protocols like HYPE, with decentralized sequencing, as foundational to building scalable DeFi systems.” The company is not the first mover in terms of launching a HYPE-based corporate treasury. On June 17, Eyenovia, Inc. (EYEN), a Nasdaq-listed ophthalmic technology firm, announced that it had entered into a securities purchase agreement with a view towards financing a $50 million HYPE treasury. Additionally, the firm plans to change its name to Hyperion DeFi and its stock ticker to HYPD later this week to reflect its new HYPE-based reserve strategy. Shares in Eyenovia closed at $4.83 on June 18, down 30.7% over the course of 24 hours. Lion Group shares closed at $3.33, up 19.78%.

With Thailand just having elected its youngest-ever Prime Minister (PM), speculation has arisen within the crypto sector as to whether the new appointee will be bullish where digital assets are concerned. On Sunday, 37-year-old Paetongtarn Shinawatra was sworn in as the Southeast Asian country’s Prime Minister, having received two-thirds of the votes in a House of Representatives ballot on Friday. On Aug. 18, a pseudonymous crypto commentator, @martypartymusic, told his 109,000 followers on X that Shinawatra’s appointment was positive for crypto. He wrote:”She is a crypto bull. Her father was a crypto bull. IMO: Thailand could be next to adopt crypto as legal tender. Let’s watch it play out."Photo by Evan Krause on UnsplashDigital wallet programShinawatra has committed to continuing a similar approach to policy as followed by her predecessor, Srettha Thavisin. That will include an emphasis on pursuing economic reform and accommodating economic stimulus measures.  One crypto-related measure introduced by her predecessor is the digital wallet handout project. According to Nikkei Asia, the scheme has been burdened with both legal and budgetary challenges. Kasit Piromya, a former Thai Foreign Minister, is understood to have said that Shinawatra would be committing “political suicide” if she continues to drive that project forward.  It’s understood that she has indicated that the government will continue with the project but that it plans to take steps to ensure that the program can proceed in a financially sustainable way. Shinawatra’s Pheu Thai Party had first floated the notion of giving 10,000 baht in digital assets, at the time valued at $300, in April 2023, to Thai citizens above the age of 16. Further moves were made to progress that $14 billion project earlier this year. While insiders have reported that Shinawatra has been non-committal about the digital wallet project, she has been quoted as stating previously that “the digital wallet scheme is a project we intend to use as a major economic stimulus.” As various commentators speculate on her likely course of action, the reality is that these matters will remain unclear until such time as she appoints a cabinet and announces relevant policies. Tanawat Sutunthivorakoon, the CEO of Thai digital asset management platform Bitazza Thailand, expressed the view that this change in leadership will have very little impact on the development of digital asset regulation in the Southeast Asian country. Regulatory developmentThe country has seen a number of crypto-positive developments over recent months. Back in March, the country’s tax authority approved a crypto income tax exemption in an effort to incentivize crypto-based fundraising. The authorities had already made crypto trading VAT-free the previous month. Earlier this month, Thailand’s Securities and Exchange Commission (SEC) introduced a digital asset regulatory sandbox in an effort to foster innovation relative to the digital assets sector. The SEC allowed institutional investors in Thailand to access U.S. spot Bitcoin exchange-traded fund (ETF) products. In June, the regulator followed up by approving the country’s first spot Bitcoin ETF.

Bitdeer Records Revenue Growth Amid Q2 LossesSingapore-based crypto mining company, Bitdeer, experienced a notable boost in cash flow during Q2 2023. However, this upswing was counterbalanced by substantial acquisition costs and share-based compensation expenses.It’s been a mixed couple of days for Bitdeer. On Thursday it emerged that the company had struck a deal with B.Riley Financial that has seen the financial services firm sign a $150 million share purchase options agreement with Bitdeer. Twenty-four hours later, there’s further good news in that the firm has increased its mining hash rate. However, it has also recorded a significant loss for Q2, 2023.Photo by David Clarke on UnsplashHash rate increaseIn its recent earnings report released on Friday, Bitdeer revealed a remarkable increase in its mining hash rate. The figures surged from 2.1 exahashes per second to an impressive 3.8 exahashes per second throughout the second quarter of 2023 by comparison with the same period in 2022. Furthermore, Bitdeer’s self-mining operations yielded 758 bitcoins in contrast to 521 bitcoins mined during the same period in the preceding year.This surge in hashing power contributed to a Q2 revenue of $93.8 million, marking a 5% year-over-year increase. Bitdeer attributed this revenue growth to its bolstered hashing power, setting a solid foundation for its financial performance.Linghui Kong, CEO of Bitdeer, shed light on pivotal developments driving the company’s growth trajectory. Kong highlighted the successful completion of the mining site in Bhutan and the establishment of a cutting-edge immersion cooling data center.Operational expansionKong emphasized: “Our 100MW mining datacenter in Bhutan is in the process of power-on testing, and the mining machines are beginning stable operation.” Additionally, he mentioned that a 175MW immersion cooling data center is currently under construction at the Tydal mining facility in Norway, with an expected completion date of 2025.Bitdeer’s expansion endeavors have led to a significant increase in its mining operations. The company now manages 199,000 mining machines, a considerable rise from the previous year’s count of 119,000. Over the past year, Bitdeer’s business model has evolved, with a majority of machines being hosted rather than self-owned.Despite the growth in operations, Bitdeer reported a net loss of $40.4 million in Q2, marking a substantial increase from the previous year’s quarterly loss of $15.6 million.Merger overheadThe Q2 losses were largely attributed to Bitdeer’s merger with the special purpose acquisition company (SPAC), Blue Safari Group Acquisition Corp. Notably, the listing fee alone for this merger amounted to $33.2 million, and share-based payment expenses added up to $9.6 million during the quarter.Bitdeer’s stock had experienced a 26% decline in the 30 days leading up to the report. However, the losses were quickly recouped, with the stock rallying by over 27% on the day of the report’s publication. This market response underscores the dynamic nature of the cryptocurrency sector and the investor sentiment surrounding it.Bitdeer’s Q2 performance showcases the company’s revenue growth propelled by enhanced hashing power. The expansion of its mining operations, coupled with strategic developments like the Bhutan mining site and immersion cooling data center, position Bitdeer for further growth.