Virtual assets lose favor as scandal bites

Following the JPEX financial fraud last month, 41 percent of Hongkongers now have no intention of holding virtual assets, marking an increase of 12 percentage points from the survey conducted five months ago, according to the Hong Kong University of Science and Technology.

Meanwhile, fewer respondents expressed a desire to hold VAs in the future, and the rate dropped by 5.2 points, reaching only 19.8 percent.

The survey conducted by the HKUST Business School, comprising two phases, took place from April 24 to May 23 and from September 28 to October 5.

The first phase involved over 5,700 respondents aged 18 or above, focusing on assessing public perception of VAs. The second phase, with over 2,200 respondents, aimed to reassess public views following the recent financial incidents.

After the JPEX incident, approximately 57 percent of respondents are now aware that the Hong Kong government mandates VAs service providers to obtain a license for operation, showing an increase of 15 percentage points from 42 percent in the initial survey phase.

However, Professor Allen Huang, Associate Dean of the HKUST Business School, highlighted that public awareness remains relatively low.

"As virtual assets become increasingly integral to the digital economy, more educational initiatives are needed to enhance public understanding and awareness of the risks and potentials of this emerging field," said Huang. This is crucial as VAs are part of Hong Kong's strategy to drive financial technology development.

Presently, just 2.7 percent of surveyed individuals believe they have a comprehensive understanding of VAs, and 8 percent claim to possess a good understanding of the subject.

The majority lack knowledge of virtual assets, with 43.3 percent of respondents not familiar with the subject and 24.6 percent stating they know nothing about it at all.

Huang notes that the public's knowledge of VAs primarily comes from unverified online sources like websites and social media rather than credible financial institutions.

For those who would like to invest in VAs, when considering investment products, approximately 55.7 percent of investors prefer to directly hold VAs like Bitcoins, and 48.5 percent opt to invest through Exchange-Traded Funds.

Moreover, investors are presently exercising more caution in their approach to VAs investments. Approximately 84 percent expressed a preference to invest less than HK$50,000 in VAs in the second-phase survey, compared with 81.3 percent in the first-phase survey.

Meanwhile, over 90 percent aim to limit it to less than 10 percent of their overall investment portfolio in the second-phase survey, compared with 86.2 percent in the previous survey.