Deribit, the world’s largest cryptocurrency derivatives exchange, is setting its sights on expanding into Hong Kong, as the city intensifies efforts to become a leading hub for virtual assets.
The Dubai-based firm is drawn to Hong Kong’s reputation as an international financial center and the growing interest in cryptocurrencies among family offices and asset managers.
“Hong Kong is a central financial hub globally and a key player in Asia,” said Jean-David Pequignot, Deribit’s Chief Commercial Officer, who is based in the city.
“If regulators address the derivatives sector, it’s a market where we would love to be.”
Deribit Eyes Hong Kong Expansion as SFC Unveils Virtual Asset Roadmap
Deribit’s expansion plans come as Hong Kong’s Securities and Futures Commission (SFC) unveiled a comprehensive roadmap to develop the city’s virtual asset ecosystem.
A key component of the plan involves exploring the introduction of virtual asset derivatives tailored for professional investors with portfolios exceeding HK$8 million (approximately US$1 million).
Currently, Hong Kong’s regulatory framework emphasizes licensing but lacks provisions for crypto derivatives trading.
Pequignot noted that derivatives, while often seen as speculative, are crucial tools for hedging and risk management.
“They allow investors to manage volatility in the crypto markets,” he said.
Deribit specializes in bitcoin and ether options, offering traders the ability to buy or sell assets at a predetermined price within a specified timeframe.
“Asia is a significant market for derivatives, with sophisticated and speculative investors,” Pequignot explained. “We aim to establish a presence in Asia, provided we can align with regulatory standards.”
While Singapore remains a notable Asian financial center, it has yet to implement a regulatory framework for crypto derivatives, positioning Hong Kong to capitalize on the opportunity.
Pequignot highlighted the increasing interest from Hong Kong-based family offices and asset managers, many of whom are key trading partners for Deribit.
“We’re witnessing a growing demand for derivatives products in the crypto space, driven by savvy individual investors, hedge funds, and institutional players,” Pequignot added.
Deribit Sees 95% Surge in Trading Volume, Hitting $1.2 Trillion in 2024
Deribit’s growth trajectory has been robust.
In 2024, the exchange recorded a 95% year-over-year increase in trading volume, reaching US$1.2 trillion.
The surge was bolstered by optimism surrounding the U.S. presidential election and bitcoin’s subsequent rally toward the US$100,000 mark.
Looking ahead, Deribit also has its eyes on the U.S. market, particularly as former President Donald Trump’s crypto-friendly stance could foster favorable regulations.
“We’re keen to serve the U.S. market once an appropriate framework is established,” Pequignot said.
Founded in 2016, Deribit is actively engaging with regulators in France and Brazil to secure derivatives licenses.
Last year, Hong Kong legislator Wu Jiexhuang proposed leveraging the city’s “one country, two systems” framework to include Bitcoin in its national reserves, aiming to bolster financial security.
A number of Hong Kong firms have also adopted a Bitcoin reserve strategy.
Just recently, HK Asia Holdings Limited announced that it expanded its Bitcoin holdings, purchasing approximately 7.88 BTC, after approval by the company’s board.
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