Bad News from Hong Kong for XRP, Arbitrum (ARB) and Nine Altcoins
In a significant reshuffle of its cryptocurrency indices, the Hong Kong Virtual Asset Rating Agency (HKVAC) has announced the delisting of several major altcoins, including XRP and Arbitrum (ARB), from its Global Major Cryptocurrency Index. This move reflects the changing landscape of the cryptocurrency market in Hong Kong, which has been positioning itself as a global crypto hub.
What is the Honk Kong Virtual Asset Rating Agency
The Hong Kong Virtual Asset Rating Agency (HKVAC) is an organization that provides fair and objective credit ratings for members in the cryptocurrency space, particularly focusing on trading platforms. HKVAC’s ratings aim to reflect the reputations of these platforms and reduce information asymmetry between market participants, thereby promoting fair competition. The agency plays a crucial role in enhancing transparency and accountability in cryptocurrency trading.
HKVAC’s ratings are issued by a licensing rating agency and are based on multi-dimensional data and data-driven methods that can more accurately reflect the future risks of exchanges. This approach is designed to avoid the possibility of human intervention and conflicts of interest, resulting in more objective rating results. The agency also has the capability to quickly monitor virtual asset risks and exchange operations using objective data, which assists regulatory authorities in their monitoring efforts.
Index Adjustment Results
The HKVAC revealed the results of its index adjustment, which will take effect on January 19, 2024. The adjustment saw the addition of several altcoins to the HKVAC Global Major Cryptocurrency Index, including Internet Computer (ICP), Near Protocol (NEAR), Optimism (OP), Injective (INJ), and Immutable (IMX). Conversely, a number of coins were removed from the index, notably Filecoin (FIL), Maker Dao (MKR), TrueUSD (TUSD), Binance USD (BUSD), and Hedera Hashgraph (HBAR).
Similarly, the HKVAC Major Cryptocurrency Index will now feature ICP, NEAR, OP, INJ, and IMX, while removing MKR, Lido Dao (LDO), MNT, QNT, and Arbitrum (ARB). In a notable change within the HKVAC Global Top 5 Indices, Solana (SOL) has replaced XRP, and Tron (TRX) has been ousted from the Top 10 Indices in favor of Avalanche (AVAX).
Implications for XRP and Arbitrum (ARB)
The delisting of XRP from the HKVAC Global Top 5 Indices comes amidst Ripple Labs’ decision to buy back $285 million worth of shares, valuing the company at $11 billion. This move could be interpreted as a positive sign for the company’s valuation, yet the delisting from the HKVAC index may impact XRP’s visibility among investors in the region.
Arbitrum (ARB), on the other hand, has been experiencing a price surge, with its value reaching a new all-time high of $2.42. Despite this bullish trend, ARB’s removal from the HKVAC Major Cryptocurrency Index could affect its perception among institutional investors who rely on such indices for investment decisions.
Hong Kong has been making strides to establish itself as a cryptocurrency center, despite the high costs associated with getting licensed as a virtual asset trading platform in the city. The region has issued its first licenses for retail crypto trading and has been open to welcoming spot crypto ETFs. These developments indicate a supportive environment for crypto innovation and investment, even as the HKVAC index adjustments suggest a more selective approach to the inclusion of digital assets.
The latest index adjustments by the HKVAC reflect the dynamic nature of the cryptocurrency market in Hong Kong. While the delisting of XRP, Arbitrum (ARB), and other altcoins may pose challenges for these assets in the short term, the overall trend in Hong Kong appears to be one of embracing the potential of cryptocurrencies. As the city continues to evolve as a crypto hub, the impact of such index changes will be closely watched by investors and industry participants alike.
Angel Marinov is the Managing Editor at Coinlabz. With extensive knowledge of crypto payments and blockchain use cases, Angel is a trusted source of accurate and timely information