Equity analysts are excited about the possibility of boosting crypto trading in Asia after Hong Kong’s Stablecoin Bill took effect on Friday. Stablecoins are virtual assets issued by the government or referencing currency. Hong Kong’s bill, like the US genius law, officially makes the process by which financial companies issue and manage virtual assets. For now, analysts at Morgan Stanley expect Stablecoins’ major applications to focus on crypto trading, saying they can attract more institutional investors to their asset class. They consider online broker Futu Holdings to be the best play and rate overweight with a price target of $164.25. Citi analysts preferred rival Fintech, also known as Tiger Brokers, and upgraded to buy from Nutral, according to a report released late July 21st. The two companies, listed in the US in 2019 before Robinhood was published, operate online brokerages to trade stocks and cryptocurrencies. They have roots in mainland China, but Beijing’s capital management and cryptography ban have evolved with a more focus on Hong Kong and Singapore. Crypto-trade markets in Hong Kong and Singapore are massive at $640 billion, even after competing for competition with unauthorized mainstream crypto exchanges. Analysts say it could see Fintech and futu as well as Robinhood’s interests. They said the main support for the Robinhood stock price surge over the past few months was the company’s crypto trading revenue. This segment doubled in the first quarter a year ago. Crypto has also grown from 3% of Robinhood’s total revenue to 21% from 2020 to 2024, according to Citi’s report. Robinhood is scheduled to release local time on Wednesday. Up Fintech and Futu have yet to disclose the date for their next revenue release. Citi analysts raised their price targets for both stocks. For Fintech, it ranges from $9.50 to $14, and for Futu, it ranges from $113 to $176. Part of the additional optimism at Up Fintech comes from the potential business opportunities with Avenir Group, an investment company linked to the founder of Bitcoin Trading Exchange Huobi. Avenir acquired a 5.9% stake in late April. “I) If Avenir Group can use TIGR as a designated crypto exchange for OTC transactions, there will be a potential rise in TIGR; ii) If Avenir Group could use TIGR as a designated custodian bank, TIGR can pay TIGR to support TIGR’s Crypto Biz development,” Citi said. Certainly there are many differences between the US crypto environment and the Hong Kong environment. In contrast to Beijing’s more conservative stance in mainland China, Hong Kong has become the country’s special administrative region and is the country’s testbed to remain globally competitive in finance. Analysts from both Citi and Morgan Stanley hope that Hong Kong’s stubcoin support will first focus more on how China’s Yuan can use it for international payments. But with US President Donald Trump’s son Eric, set to headline the Bitcoin Conference in Hong Kong next month, the region’s bigger ambitions are clear. —CNBC’s Michael Bloom contributed to this report.
