In a bold strategic pivot, Hua兴 Capital Holdings Limited (1911.HK) has announced a $100 million allocation to digital assets, marking one of the most significant moves by a traditional Chinese financial institution into the Web3.0 and cryptocurrency space. This decision comes more than two years after the company’s founder, Bao Fan, was detained on bribery allegations—a period during which the firm struggled with reputational damage and declining core revenues.
Now, as China's broader economic slowdown continues to weigh on investment banking activity, Hua兴 Capital is betting that the rapidly maturing digital asset ecosystem—particularly in Hong Kong—can serve as a catalyst for growth and valuation re-rating.
Strategic Shift Toward Web3.0
Last week, Hua兴 Capital officially announced that its board had approved the use of up to $100 million in proprietary capital to invest in Web3.0 technologies and related digital assets. The initiative includes both direct investments in blockchain-based startups and potential trading activities involving cryptocurrencies such as Bitcoin and stablecoins like USDC.
To strengthen its expertise in this domain, the company also appointed Fu Frank Kan, co-founder of Math Global Foundation—a developer of cryptocurrency wallets and software—as an independent non-executive director. This appointment signals Hua兴 Capital’s intent to build institutional-grade capabilities in digital asset management.
“Web3.0 and crypto assets hold immense potential and align with global trends in finance and commerce,” the company stated in its official release.
This strategic shift is not entirely unexpected. Hua兴 Capital has long focused on technology-driven sectors, and its early investment in Circle Internet Group (CRCL.US), issuer of the USDC stablecoin, proved highly profitable when Circle went public at an $18 billion valuation earlier this year. That success likely emboldened leadership to double down on the sector.
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Why Now? Market Tailwinds and Hong Kong’s Ambitions
The timing of Hua兴 Capital’s move coincides with several favorable developments:
- Bitcoin’s bull run: BTC has surpassed $100,000 multiple times in 2025, delivering over 70% gains in the past year alone.
- Growing institutional adoption: Major Wall Street firms like JPMorgan and Goldman Sachs are expanding their crypto offerings.
- Hong Kong’s regulatory push: The SAR government recently released its Hong Kong Digital Assets Development Policy Statement 2.0, reinforcing its ambition to become a global crypto hub.
Despite cryptocurrency remaining illegal in mainland China, Hong Kong operates under a separate regulatory framework that now permits retail trading of approved digital assets. This has attracted major exchanges like HashKey and OSL, creating a thriving ecosystem for startups, investors, and financial institutions.
Hua兴 Capital explicitly cited these “proactive policies” from the Hong Kong government as a key motivation behind its digital asset strategy. By aligning itself with this vision, the firm aims to position itself at the forefront of Asia’s emerging digital finance landscape.
Risks in a Volatile Market
While the opportunity is compelling, so are the risks. Cryptocurrencies remain highly volatile. After years of stagnation, the current bull market could reverse quickly, especially if macroeconomic conditions shift or regulatory scrutiny intensifies.
Moreover, allocating $100 million—more than half of its cash reserves at year-end—to such a speculative asset class underscores the urgency Hua兴 Capital feels to reverse years of underperformance. Since Bao Fan’s detention in 2023, the company has faced prolonged uncertainty, with its stock trading well below its IPO price.
Although it has recovered somewhat since resuming trading after a 17-month suspension, Hua兴 Capital still trades at a price-to-sales (P/S) ratio of around 2.5x—comparable to CICC (3908.HK), but without matching profitability or market confidence.
A Calculated Gamble with Long-Term Payoff Potential
The $100 million fund may be deployed across multiple vectors:
- Equity investments in Web3.0 startups
- Direct holdings in major cryptocurrencies
- Participation in tokenized financial products
- Strategic partnerships with blockchain platforms
The company has not ruled out short-term trading for profit but emphasized that its focus is on long-term value creation through technological innovation and ecosystem development.
This mirrors broader trends among global financial institutions embracing digital transformation. However, unlike Western banks that often limit exposure via ETFs or custody services, Hua兴 Capital is taking a more hands-on approach—signaling deeper conviction in the sector’s maturity.
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FAQ: Understanding Hua兴 Capital’s Crypto Move
1. Why is Hua兴 Capital investing in digital assets now?
After years of weak performance due to China’s economic slowdown and internal turmoil following its founder’s detention, Hua兴 Capital sees Web3.0 and crypto as high-growth opportunities aligned with Hong Kong’s pro-innovation policies and rising institutional interest.
2. Is Hua兴 Capital directly buying Bitcoin or other cryptocurrencies?
While not confirmed, the company has indicated it may engage in digital asset trading, including stablecoins like USDC. The exact allocation between direct crypto purchases and venture investments remains undisclosed.
3. How much of Hua兴 Capital’s cash is being used for this investment?
The $100 million commitment represents over half of its reported cash holdings at the end of last year, highlighting the strategic importance—and financial risk—of this initiative.
4. What role does Hong Kong play in this strategy?
Hong Kong’s supportive regulatory environment for digital assets makes it an ideal launchpad for Chinese financial firms exploring blockchain and crypto. Its new policy framework encourages innovation while maintaining compliance safeguards.
5. Could this investment boost Hua兴 Capital’s stock performance?
If successful, this move could reposition the firm as a forward-thinking fintech player, attracting new investors and potentially lifting its valuation. However, volatility in crypto markets means results are uncertain.
6. Has Hua兴 Capital invested in crypto before?
Yes. In 2018, it backed Circle Internet Group through its Hua兴 New Economy Fund—an investment that yielded substantial returns after Circle’s NYSE debut in 2025.
Broader Industry Implications
Hua兴 Capital is not alone in exploring digital assets. Other Chinese firms are making similar moves:
- Dmall (2586.HK), a retail SaaS provider, recently purchased Bitcoin and is preparing to apply for a Hong Kong stablecoin license.
- Several tech and consumer brands have launched tokenized loyalty programs or NFT campaigns.
These developments suggest a quiet but accelerating institutional embrace of blockchain technology—even within China’s tightly controlled financial system.
For Hua兴 Capital, this $100 million bet isn’t just about returns—it’s about relevance. In an era where fintech innovation defines competitive advantage, failing to adapt could mean obsolescence.
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Final Thoughts: A New Chapter Begins
Hua兴 Capital’s foray into digital assets marks a pivotal moment—not just for the firm, but for China’s broader financial ecosystem. It reflects growing recognition that blockchain and cryptocurrencies are no longer fringe experiments, but legitimate components of modern finance.
While challenges remain—market volatility, regulatory ambiguity, and execution risk—the sheer scale of this commitment suggests Hua兴 Capital believes the upside justifies the gamble.
If executed wisely, this initiative could do more than revive performance—it could redefine what it means to be a Chinese investment bank in the digital age.
Core Keywords: Hua兴 Capital, digital assets, Web3.0, cryptocurrency investment, Hong Kong crypto policy, blockchain finance, institutional crypto adoption