As traditional capital accelerates its layout, the cryptocurrency market is showing significant institutional characteristics in 2025, with large institutional-level block trades highlighting the demand in the crypto industry. Specifically, the global listed companies' Bitcoin holdings surged by 16.11% quarter-on-quarter in the first quarter to 688,000 coins. The number of companies holding Bitcoin increased to 79, and the demand for single block trades over $5 million skyrocketed by 210% year-on-year, with over $2.1 billion worth of Bitcoin flowing from retail wallets to institutional custody accounts.
However, the lack of industry compliance institutions, liquidity fragmentation, and hidden risks to fund safety are three major pain points constraining market expansion.
In this context, the explosive growth of the over-the-counter block trading business (hereinafter referred to as OPT) of the licensed platform HashKey Exchange has attracted attention, with its trading volume in the first quarter soaring over 400% year-on-year, and a 28-fold increase in March alone. In the second quarter, the daily trading volume broke through the $100 million mark, and its solutions built on licensed compliance, liquidity aggregation, and bank-level security systems are innovating professionally to resolve industry predicaments.
Trust crisis in a compliance vacuum: How licensed operations can rebuild industry credibility
The strong growth of HashKey OPT's business is driven in part by its strict compliance and licensed operations, which have built a solid foundation for trust in trading.
The virtual asset industry has long been constrained by the trust dilemma of 'unlicensed operations.' Non-compliant trading platforms often create a facade of compliance by falsifying regulatory qualifications, while actually attracting investors with promises of high returns detached from market logic, subsequently implementing fund retention through withdrawal restrictions and additional charges such as 'margin' and 'unfreeze fees.' Technically, these platforms generally suffer from chaotic hot wallet private key management and ineffective isolation of hot and cold storage, leading to frequent hacker attacks. Such platforms deliberately weaken KYC audit processes, objectively becoming gray channels for money laundering activities, dark web transactions, and even ransomware proceeds circulation. This ecological environment not only sets extremely high decision-making thresholds for ordinary investors but also deters institutional investors due to the excessively high costs of compliance risk assessments.
In sharp contrast, HashKey Exchange, as one of the first licensed retail virtual asset exchanges in Hong Kong, holds licenses from the Hong Kong Securities and Futures Commission for Type 1 (securities trading), Type 7 (providing automated trading services), and virtual asset trading platforms, strictly adhering to the Securities and Futures Ordinance and the Anti-Money Laundering Ordinance, undergoing penetrating supervision by the SFC every month. This compliance qualification forms a distinct industry comparison. As of January 2025, HashKey is the only licensed exchange in Hong Kong ranked in the top ten globally on Coingecko (ranked 7th), with its compliance becoming a core criterion for institutional investors when selecting collaborative platforms.
The guarantee of licensed compliance effectively addresses the trust blind spots of traditional unlicensed platforms, providing institutional funds with a safety anchor equivalent to that of traditional financial markets. This is also a significant reason why many institutions and large capital investors choose HashKey's over-the-counter block trading as their trading channel.
Liquidity stratification dilemma: How aggregation ecology can break through trading efficiency bottlenecks
The breakthroughs in market efficiency achieved by HashKey OPT stem from its creative resolution of the liquidity fragmentation dilemma, building a rapid and precise trading execution system.
The virtual asset market has long faced the problem of uneven liquidity distribution, where the thin order books of medium and small platforms lead to high slippage on large trades, and the liquidity monopoly of leading platforms exacerbates market fragmentation. Institutional investors often encounter severe slippage when conducting large trades in the secondary market; for orders over $5 million on non-leading exchanges, there is an average price impact of 1.5%-3%. Market makers show low willingness to quote, causing the bid-ask spread to widen to 2-3 times the normal rate, and liquidity is easily evaporated during market fluctuations. Some exchanges use 'over-the-counter trading' to split large orders and extend trading time. This liquidity fragmentation forces institutions to disperse orders, exacerbating market fragmentation and creating a vicious cycle. Therefore, institutional users need to leverage block trades to avoid such losses in the secondary market, and HashKey OPT constructs an industry-leading liquidity solution through a dual drive of 'aggregation + innovation'. In 2024, it plans to launch a 'flash exchange' feature, and in April 2025, it will launch a dedicated section for 'block trades'. HashKey OPT aggregates over 20 leading global liquidity providers, relying on a professional trading network and efficient matching mechanisms to provide solid trading depth for large transactions, ensuring efficient execution and controllable costs, significantly improving the efficiency of block trading.
In Q1 2025, the OPT business volume achieved a doubling growth compared to the previous quarter, becoming the fastest-growing core business segment. Meanwhile, the deep collaboration between the platform and top global banks has realized one-stop settlement for fiat and digital assets, significantly reducing friction in fund circulation. This combination of 'liquidity aggregation + technology empowerment + settlement optimization' accurately responds to institutional clients' core demands for trading efficiency and cost control.
Hidden risks to fund safety: A new paradigm for the industry under the protection of fund safety
In addition, the market recognition of HashKey OPT continues to rise, with its innovative protection and precise construction of fund safety under deep collaboration with top global banks being the core pillar.
The virtual asset industry has long faced severe challenges regarding fund safety. The risk of 'black U' looms like the sword of Damocles, and once institutions are involved, fund freezes, legal disputes, and reputational collapses follow. The chaos in fiat fund inflow and outflow channels, along with informal channels leading to low fund circulation efficiency, also easily triggers regulatory risks. In addition, there are frequent vulnerabilities in asset custody, with an imbalance in the ratio of hot to cold wallets and a hardware security module (HSM) deployment rate of less than 10%, leading to significant losses of institutional assets due to hacker attacks. These overlapping pain points make institutions wary of virtual asset trading, limiting the momentum for industry development.
HashKey OPT has built a targeted protection system. All digital assets undergo strict on-chain checks, using blockchain analysis technology to trace the source of assets, eliminating 'black U' risks from the source. Users trade directly with licensed exchanges, whose qualifications are rigorously audited by regulatory bodies such as the Hong Kong Securities and Futures Commission, ensuring that the entire trading process is legal and compliant, avoiding involvement in illegal fund circulation vortexes. In terms of fiat currency channels, it has integrated with major banks such as Standard Chartered, leveraging a bank-level risk control system to ensure clear and transparent fund transactions. This high-quality channel, rare in the crypto field, solves the compliance challenges for institutions regarding fund inflows and outflows. At the same time, it enhances treasury management, employing advanced technologies and management processes such as multi-signature and real-time monitoring to ensure the safety of asset storage. This multi-dimensional protection of 'on-chain tracing + licensed trading + compliant channels + smart treasury' accurately addresses industry pain points, providing solid guarantees for fund safety for institutional investors and injecting new momentum into the healthy development of the virtual asset market.
Conclusion: Insights from single-point breakthroughs to ecological reconstruction in the industry
The explosive growth of HashKey OPT validates the market logic of 'functional compliance and transactional institutionalization.' While the industry is still paying the price of trust due to unlicensed chaos, HashKey is defining a new paradigm for the virtual asset industry based on licensed compliance, liquidity aggregation, and asset safety. Only by transforming pain points into functional innovation can we open up a new cycle of sustainable growth in the wave of institutionalization.
In the future, HashKey Exchange is expected to further promote the virtual asset market's transition from 'barbaric growth' to 'value-driven' development. Its explored model of 'licensed compliance + efficient liquidity + asset safety' not only provides a replicable path for the industry to solve development dilemmas but also proves to the traditional financial system that the virtual asset market can completely grow into an important part of a mature financial ecosystem within the balance of technological innovation and regulatory frameworks.