Since its launch in 2018, HashKey Capital has rapidly claimed its position as a major player in the crypto and blockchain investment arena. Currently managing over $1 billion in assets, the firm operates out of financial hubs such as Hong Kong and Singapore, while expanding its influence into the U.S. and Japan.
Recently, HashKey Capital announced The firm recently completed the establishment of its third fund with a substantial capital of $500 million. Supported by various institutional investors including sovereign wealth funds, corporations, and family offices, the HashKey FinTech Investment Fund III will concentrate on investments investing across emerging markets and web3 projects globally.
This fund aims to focus on the infrastructure, tools, and applications that are critical for the widespread acceptance of blockchain technologies. During a recent conversation with Sergei Medvedev, co-founder of Metaverse Post, Xiao Xiao from HashKey Capital shares his thoughts on the current landscape of crypto, the ongoing web3 revival in Hong Kong, as well as the future of the metaverse and AI.
Sergei Medvedev: Despite the upward trend in Bitcoin’s price, the overall global financial landscape appears quite unstable. Would you classify this as a bear market or a burgeoning bull market? Should we brace for potential volatility ahead?
It seems like we’re still navigating through bear market territory, yet I believe we might already be at the turning point. Events such as the bankruptcies of SVB and FTX have led to a greater belief in decentralization, and interest rate hikes appear to be stabilizing. Following the SVB crisis, we witnessed a significant spike in Bitcoin’s value, with mainstream tokens also experiencing a rapid increase in price. I truly believe that the broader economic conditions will also begin to improve.
Moreover, with the recent completion of the Shanghai upgrade for Ethereum, I anticipate a surge of institutional investment into the Ethereum space, particularly for staking purposes, as it offers an almost risk-free yield. And given Ethereum’s current lower price point, I foresee an influx of capital into this ecosystem.
Taking everything into consideration, I genuinely believe we may be nearing the low point. Most indicators seem to be favoring a recovery.
Sergei Medvedev: In today’s market, we hear a lot about cryptocurrency adoption. Can we genuinely claim that we’ve witnessed substantial adoption amid global economic turmoil? Do institutions view cryptocurrency as a viable option now? Has it become mainstream in their eyes?
The concise answer is yes. Many well-established firms are allocating a portion of their portfolios to cryptocurrency, as Bitcoin and Ethereum increasingly resemble alternative asset classes. This allocation provides institutions an avenue to diversify their risks within their investment strategies.
Furthermore, the value of crypto extends beyond mere tokens or pricing. It signifies the innovative advancements brought forth by blockchain technology, which is something that banks and traditional exchanges can greatly benefit from. For instance, centralized exchanges are seeking increased transparency for investors, so integrating smart contracts could facilitate transactions while ensuring they are recorded on the blockchain seamlessly. We’re beginning to see a rise in hybrid exchanges that list assets in a permissioned manner while allowing users to trade directly on the blockchain using smart contracts, thereby reducing the risk of malicious actions. The potential for wash trading could become even more burdensome, but blockchain technology can certainly help bridge trust gaps and address regulatory concerns for traditional financial entities.
Sergei Medvedev: Why do you think we’re witnessing a resurgence of the web3 landscape in Hong Kong at this moment?
I’ve indeed noticed some shifts, but having recently moved from Singapore, I’ve witnessed similar transformations there. There are interesting contrasts between the two markets. In Singapore, there’s a strong presence of token funds and blockchain VCs, while Hong Kong boasts an abundance of financial institutions and entertainment enterprises. The wealth of movie stars and producers here suggests that the NFT and metaverse sectors can thrive significantly in this location. I perceive these two markets not as rivals but rather as complementary; together they form a crucial component of the Asian economic scene.
Additionally, there’s a prevailing respect for the Asian market, especially given the relatively favorable regulatory climate compared to Europe and the U.S., likely resulting in increased focus on this region.
Sergei Medvedev: How do you envision the overall growth of the metaverse market?
To be honest, the current user experience across most metaverse platforms leaves much to be desired. Nevertheless, we’re observing numerous large brands, like LVMH and various e-commerce entities, piloting experiments within this space.
The potential of the metaverse lies in its ability to enhance user experiences, particularly in immersive 3D environments where users can engage with content far beyond standard web pages. While in theory, this promises a superior experience, we are still in the nascent stages of development, necessitating further infrastructure advancements. That said, given the scalability offered by Ethereum and the advancements in layer-two solutions and decentralized rendering, I am optimistic about the potential for user experience improvements in the near to mid-term.
Sergei Medvedev: There’s a significant buzz surrounding : consumer AI solutions. Do you believe this technology will revolutionize work processes? Are you incorporating AI within your company or portfolio? portfolio companies implementing AI ?
Absolutely! I’ve seen a multitude of startups and portfolio companies embracing AI technology. For instance, artificial intelligence can serve as a virtual assistant, playing a pivotal role in community management or enhancing data analysis capabilities. It’s a promising direction, and the synergy between AI and blockchain appears to be quite promising.
AI can augment labor efficiency, while blockchain can transform the dynamics between producers and consumers. This reflects the emerging gig economy where everyone contributes to the ecosystem and shares in its rewards. These technologies can streamline machine learning processes, making data feeding into AI models much more effective. I believe that these two innovations are set to become incredibly synergistic, and we’re excited about the merging of these concepts.
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