Guotai Junan International (Hong Kong stock code: 01788) experienced a single-day surge of 198.39% on June 25, 2025, with an intraday maximum increase of 200%, closing at HKD 3.70, reaching a new high in nearly a year. The core reasons for this anomaly and its market impact are as follows:
Core reasons for the surge
Approval of virtual asset licenses
On June 24, Guotai Junan International officially received approval from the Hong Kong Securities and Futures Commission to upgrade its existing securities trading license (Type 1 license) to a comprehensive license that can provide virtual asset trading services. After the license upgrade, clients can directly trade mainstream cryptocurrencies such as Bitcoin and Ethereum, as well as stablecoins like Tether (USDT) through its platform, while also providing related investment consulting and derivative services.
Industry status: Becoming the first Hong Kong Chinese-funded brokerage to obtain this comprehensive license marks a key breakthrough in the deep involvement of traditional financial institutions in virtual asset trading.
Policies and industry trends driving
Hong Kong's virtual asset regulatory framework is improving: The Hong Kong (Stablecoin Regulation) will take effect on August 1, requiring stablecoin issuers to obtain licenses and ensure that reserve assets are pegged to face value at a 1:1 ratio, promoting the process of compliance.
Context of Sino-US financial competition: The market believes that stablecoins may become a new tool for cross-border payments, and Guotai Junan International is exploring the path of Renminbi internationalization through this, attracting capital layout.
Market impact and chain reaction
The Hong Kong brokerage sector collectively strengthened.
Shenwan Hongyuan Hong Kong (up 14%), Hongye Futures (up 33%), and招商证券 (up 13%) also surged, with the Chinese-funded brokerage index rising by 11.75% in a single day.
Surge in trading volume: Guotai Junan International's total trading volume reached HKD 16.385 billion throughout the day, accounting for 6% of the total trading volume of Hong Kong stocks, with a turnover rate of 68.5%.
The A-share brokerage and financial technology stocks rose in tandem.
The A-share brokerage index rose by 5.52%, with Guosheng Financial Holdings and Tianfeng Securities hitting their daily limit; financial technology stocks such as Zhihang (+20%) and Tonghuashun (+14%) also saw significant increases.
Mapping effect: The market expects more Chinese-funded brokerages to follow suit with license upgrades, driving a revaluation of the sector.
Severe fluctuations the next day (June 26)
In the early trading session, it once again surged by 89% to HKD 7.02, but then quickly plummeted, with an intraday amplitude of 106%, closing down 4.32% to HKD 3.54. Investors who chased high prices may have lost over 50% in a single day.
Reason: Industry insiders revealed that multiple Hong Kong brokerages have submitted license upgrade applications (e.g., Tianfeng International was approved on the 26th), reducing scarcity expectations.
Controversies and risk warnings
Doubtful actual business contribution
Licenses are unlikely to significantly enhance performance in the short term, with the proportion of cryptocurrency trading fee income expected to be limited, and mainland investors currently unable to participate.
The Bank for International Settlements (BIS) warns that stablecoins may threaten monetary sovereignty and financial stability, and regulatory supervision needs to be strengthened.
Market sentiment drives short-term speculation
The surge in stock prices is driven by speculation on the theme of 'stablecoins + financial innovation', with a weak correlation to fundamentals. As analyst Tao Shengyu pointed out: 'Aligns with the market's phase-specific hotspots, but sustainability remains to be verified.'
Long-term significance and industry outlook
Financial innovation testing ground
Hong Kong promotes the transformation of Chinese-funded securities firms into 'digital financial hubs' through license upgrades, exploring the application of stablecoins in cross-border payments and asset securitization (RWA), aiding the internationalization of the Renminbi.
Expansion of brokerage business boundaries
Traditional brokerages can open up a second growth curve by providing virtual asset services, shifting from brokerage conduit to asset issuers (such as tokenized bonds), but need to balance innovation and risk control.
Summary
On the demand and market confidence level: Guotai Junan International received approval from the Hong Kong Securities and Futures Commission to provide virtual asset trading services, stimulating a surge in stock prices and signaling that traditional financial giants are accelerating their entry into the cryptocurrency industry, allowing the market to see that virtual asset trading is moving towards compliance and mainstream acceptance, enhancing investor confidence in virtual currencies, which may attract more investors to invest in the virtual currency market, increasing market demand for virtual currencies.
On the capital flow level: The surge in Guotai Junan International's stock price attracts a large influx of funds into related concept stocks, which may divert some funds originally planned for the virtual currency market in the short term. However, in the long run, the layout of virtual asset trading by brokerages like Guotai Junan International will attract more incremental funds into the virtual currency market, driving up virtual currency prices.
On the market ecology level: Guotai Junan International becoming the first Chinese-funded brokerage to provide virtual asset trading services will prompt more financial institutions to follow suit in laying out virtual asset trading business, improving the virtual currency market ecology, and providing more convenient and secure channels for virtual currency trading, which is conducive to the long-term development of the virtual currency market.
On the industry attention level: The soaring stock price of Guotai Junan International and related events have attracted more media, investors, and regulatory agencies' attention to the virtual currency industry. Positive attention can attract more participants into the market and promote the development of the virtual currency industry; however, it may also trigger stricter regulatory scrutiny, putting certain pressure on the virtual currency market.
The explosive rise of Guotai Junan International is a typical event resonating with policy dividends and market sentiment: driven in the short term by the scarcity of licenses and the narrative of stablecoins, but the sharp fluctuation in stock prices reflects the characteristics of capital speculation; in the long term, it marks Hong Kong's leading role in the process of virtual asset compliance, injecting new variables into traditional finance. Investors need to be wary of pure concept speculation risks and pay attention to the subsequent pace of license issuance and the progress of actual business implementation.
