Hong Kong: Non-crypto companies are buying Bitcoin

1. Non-encrypted companies in Hong Kong, China are buying Bitcoin

Golden Finance reported that Hong Kong food consumer brand DayDayCook (DDC) announced the implementation of a Bitcoin reserve strategy on May 15, and has immediately purchased 100 Bitcoins worth approximately US$10.4 million. According to CEO Zhu Xiaoying's shareholder letter, the company plans to acquire a total of 5,000 BTC in the next 36 months, with the goal of reaching 500 by the end of 2025.

In Hong Kong, China, there are still many non-encrypted companies that have purchased Bitcoin. The following are some public reports of non-encrypted business companies in Hong Kong purchasing Bitcoin.

On February 13, 2025, Hong Kong Asia Holdings Limited purchased 1 Bitcoin at a cost of approximately $96,150, with funds coming from the group's internal resources. On February 20, 2025, the company purchased approximately 7.88 Bitcoins at a total cost of approximately $761,705, increasing its total Bitcoin holdings to approximately 8.88, with an average purchase cost of $97,021 per coin and a total investment of approximately $861,500. On March 20, 2025, the company purchased 10 BTC at a total cost of $858.5k, an acquisition that effectively doubled the company's Bitcoin holdings, bringing the total to 18.88 BTC.

According to Globenewswire, Ming Shing Group Holdings Limited (NASDAQ: MSW), a Hong Kong company mainly engaged in mud and water engineering, announced that its wholly-owned Hong Kong subsidiary Lead Benefit (HK) Limited ("Lead Benefit") purchased 500 bitcoins at an average price of US$94,375 per bitcoin on January 9, 2025, with a total investment of approximately US$47 million.

Hong Kong Asia Holdings (01723.HK) announced that on April 11, 2025, the group further purchased approximately 10 units of bitcoin in the open market for a total consideration of HK$6,267,800. The consideration for the further bitcoin purchase was paid in cash and was determined based on the buying and selling prices of bitcoin in the open market, respectively. The funding source for the further bitcoin purchase was the group's available cash reserves at the time.

On March 31, 2025, Hong Kong investment company Avenir increased its stake in BlackRock iShares Bitcoin Trust (IBIT) to 14.7 million shares, with a total value of US$691 million. Prior to the first quarter of 2025, Avenir also bought 3.4 million shares of IBIT, bringing the value of its holdings in the fund to nearly US$700 million.

2. Why do non-crypto companies in Hong Kong, China buy Bitcoin?

Hong Kong DAYDAYCOOK purchased Bitcoin for the following reasons:

First, to obtain support from strategic investors.The new investors will inject Bitcoin into DDC in exchange for DDC's Class A common stock. This form of cooperation not only brings financial support to the company, but also reflects the strategic investors' common belief in the company's development and the value of Bitcoin as a strategic asset, which will help the company strengthen its balance sheet and promote long-term development.

Second,

Third, we are optimistic about the potential of blockchain technology.The company believes that the blockchain technology behind Bitcoin has the potential for change. This move highlights its confidence in blockchain technology and its commitment to pioneering corporate financial strategies. It also reflects the company's determination to stand at the forefront of digital asset innovation. It hopes to explore the potential application of blockchain technology in corporate operations and value creation by participating in the Bitcoin reserve strategy.

It can be said that non-crypto companies have various motivations for purchasing Bitcoin, which can be summarized as follows.

The first is asset diversification and appreciation. Cryptocurrency is becoming increasingly popular in the business world. As the largest cryptocurrency by market value, Bitcoin is a reliable value storage tool with a certain appreciation space. Investing in Bitcoin can diversify the company's investment portfolio and increase the value of assets. At the same time, you can also use idle funds to buy Bitcoin as a short-term investment to capture the potential appreciation of Bitcoin and increase the company's assets.

Second, hedging risks. The global economic situation is uncertain, governments are implementing fiscal stimulus measures, and legal currencies are facing depreciation pressure. Bitcoin has the advantage of hedging against the depreciation of legal currencies and can be used as a hedging tool to protect company assets.

Third, liquidity management. The Bitcoin market has high liquidity and can be easily disposed of. When funds are needed, Bitcoin can be quickly converted into cash to provide financial support for the company's core business.

Fourth, technological innovation and industry exploration. Purchasing Bitcoin can show investors and stakeholders that the company is determined to embrace technological innovation, prepare for entering the blockchain industry, and adapt to the changing global financial landscape.

3. Is it legal to invest in cryptocurrency in Hong Kong, China?

In recent years, the Hong Kong Special Administrative Region (hereinafter referred to as "Hong Kong") government has always maintained a relatively open attitude towards crypto assets. The Hong Kong Securities Regulatory Commission's "Guidelines for Virtual Asset Trading Platform Operators" will take effect on June 1, 2023, implementing licensed management for cryptocurrency exchanges, and Hong Kong has entered the era of legalized cryptocurrency trading.

In the process of Hong Kong, China constantly adjusting its virtual asset regulatory policy goals to become a global cryptocurrency center city, the judicial position has been adjusted accordingly. On March 31, 2023, in the ruling of Re Gatecoin Limited (In Liquidation) [2023] HKCFI 914 (hereinafter referred to as the “Gatecoin case”), the Hong Kong Court of First Instance ruled for the first time that cryptocurrencies are property under Hong Kong law and can be held in trust. Hong Kong regulators have also clearly included mainstream cryptocurrencies such as Bitcoin and Ethereum in the category of compliant assets, allowing them to be used as proof of wealth for investment certificates. In February 2025, Invest Hong Kong approved a successful application for investment immigration using HK$30 million in Ethereum as proof of assets. Prior to this, in October 2024, Invest Hong Kong approved for the first time an investment immigration application using Bitcoin as proof of assets. Of course, there are no cases of verification with other cryptocurrency assets. In addition, in terms of company operation-related regulations, there are no clear restrictions on using cryptocurrency to invest in establishing a company or increasing capital. However, transactions and storage of cryptocurrencies must comply with the Hong Kong Securities and Futures Commission's regulatory provisions on virtual assets, such as virtual asset trading platforms must apply for a license from the Hong Kong Securities and Futures Commission. However, using cryptocurrency as a form of investment may still require meeting some conditions, such as the cryptocurrency used for investment must be held in a licensed exchange in Hong Kong and be able to provide standardized monthly statements.

Combining various materials and operational practices, in Hong Kong, the specific operation of investing with cryptocurrency needs to pay attention to the following aspects.

First, it is necessary to prove the account owner, that is, to provide materials to prove that it is your own account. As we all know, the characteristics of cryptocurrency include anonymous transactions and high encryption technology, that is, accounts entered with complex passwords will not directly display the name of the holder and other personal information, which also explains why the Hong Kong government has never said that cryptocurrency cannot be used for application in the Hong Kong investment plan. According to our experience and understanding, in fund investment, personal commitment plus lawyer witness, supplemented by other relevant materials (including contracts, relevant transaction records, etc.), generally can be recognized by relevant institutions.

Second, choose a licensed trading platform and register to verify your identity. Considering the platform's security, reliability, transaction fees and customer service, choose a cryptocurrency trading platform that is compliant, regulated and supports related businesses in Hong Kong, such as HashKey, OSL and other licensed exchanges. Then register an account on the selected platform and upload identity documents such as ID cards or passports, as well as address proof documents such as utility bills or bank statements as required. Contact information is also required and security measures such as two-factor authentication may need to be set up.

The third is to complete the investment. Deposit the funds used for investment into the trading account. After the funds arrive, choose to purchase the required cryptocurrency on the platform; of course, if it is a personal account, you need to complete the relevant procedures to ensure that there are relevant assets in the address. If it is used for investment immigration and other situations, you need to find a professional accountant to issue a report to prove that the cryptocurrency assets really exist and belong to the applicant; if it is used for other scenarios such as company investment, it is necessary to follow the requirements of relevant laws and regulations and the company's articles of association according to the specific situation, which may involve consultations with other shareholders, signing of investment agreements and other steps to clarify the amount and proportion of cryptocurrency investment.

During the entire operation, it is necessary to ensure compliance with relevant laws and regulations in Hong Kong, especially those regarding cryptocurrency transactions and anti-money laundering.

Fourth, will non-crypto companies in Hong Kong, China follow up?

For Hong Kong, China, whether non-crypto business companies follow up and invest in Bitcoin, its rationality needs to be comprehensively analyzed from multiple dimensions such as strategic goal confirmation, risk tolerance, and systematic compliance.

First, the strategic goal must be clear

First, confirm the strategic goal. If the goal is to make a profit from short-term price fluctuations, it is necessary to evaluate whether the company has professional trading capabilities (such as risk assessment, stop-loss mechanism, market analysis) to avoid affecting the cash flow of the main business due to price plunges. If it is for long-term technology reserves or business transformation (such as the layout of blockchain payment), it is necessary to clarify the positioning of Bitcoin in the strategy (such as underlying assets, technical research tools, business collaboration tools) to avoid "following the trend and hype". For example, Hong Kong game company Boyaa Interactive invested in Bitcoin to expand its Web3 game business, and the strategic logic is clear; while companies that simply follow the trend may face asset impairment risks.

In addition, it is necessary to evaluate whether Bitcoin can generate synergies with the company's core business. For example, cross-border e-commerce companies holding Bitcoin can reduce exchange rate settlement costs, and payment companies can increase service diversity by deploying cryptocurrency payments. If traditional manufacturing companies invest in Bitcoin without business connections, they may be questioned as "not doing their job properly", which will affect investor confidence.

Second, risk management should be taken seriously

First, financial risk. It is necessary to calculate the proportion of Bitcoin investment in the company's current assets/total assets (it is recommended to refer to the threshold of no more than 5% for overseas companies) to avoid excessive allocation leading to deterioration of asset liquidity. If a company has insufficient cash reserves and high short-term debts, but purchases Bitcoin on a large scale, it may trigger debt repayment risks (such as MicroStrategy once faced a debt crisis due to the plunge in Bitcoin). Bitcoin is measured at fair value, and price fluctuations are directly included in current profit and loss. It is necessary to assess whether the company can withstand the profit impact under extreme market conditions (such as a 30% plunge in a single day) to avoid drastic fluctuations in financial reports.

Another is technical risk. Private key management, cold wallet storage, etc. need to comply with industry standards, and there must be emergency plans to deal with hacker attacks and internal fraud. If the scale is certain, it may be necessary to hedge price fluctuations through derivatives (such as futures contracts). For example, some companies will lock in profits by selling call options.

Third, regulatory compliance must be systematic

The company needs to confirm whether it is a "regulated entity" as defined in the Virtual Asset Service Provider Regulations (VASP Regulations). If a non-encrypted business company only invests its own funds and does not provide trading services to the public, it usually does not need to apply for a VASP license, but must comply with anti-money laundering and tax regulations. If the company has branches overseas (such as the United States and the European Union), it must also comply with local regulations (such as the US SEC considers Bitcoin as a commodity, and the EU applies the MiCA Act).

If it constitutes a major investment matter required by the Hong Kong Stock Exchange for listed companies to disclose, it must be disclosed in accordance with the regulations, that is, if the proportion of Bitcoin investment in net assets exceeds 5%, it must be listed separately in the financial report, and the investment purpose, valuation method and risk warning must be explained. There have been companies that did not disclose their crypto asset holdings, which caused stock price fluctuations after being questioned by the Hong Kong Stock Exchange.

Investing in Bitcoin, consider whether it has been formally resolved by the board of directors, whether to introduce independent financial advisors to participate in risk assessment, and avoid irrational investment caused by the "one-man show" of management (such as a company executive leading a large purchase due to personal beliefs). It is necessary to clearly explain the investment logic to shareholders and the market to avoid misleading propaganda (such as confusing Bitcoin with "blockchain technology", which is actually pure speculation). For example, MicroStrategy regularly publishes the "Bitcoin Holdings Report", which discloses the holding strategy and risks in detail to enhance market trust.

For specific operations, it is recommended to trade through a licensed exchange in Hong Kong (such as HKD.com under HKEX) and comply with the Anti-Money Laundering Ordinance (AMLO) and tax reporting requirements.

In Hong Kong, China, the rationality of non-crypto companies investing in Bitcoin depends on the balance of strategy, risk, and compliance. For companies that lack technical reserves and business synergy, blindly following the trend may damage long-term value; for companies with a clear layout and perfect risk control, Bitcoin can be used as part of a diversification and digital innovation strategy, following the principles of "optimistic attempts, cautious evaluation, small-step pilots, continuous review, and dynamic adjustment." (The pictures in the article are generated by Doubao)