Volatility Hits Concept Stocks as Circle’s US Listing Soars 168%
Hong Kong’s landmark Stablecoin Ordinance has ignited a speculative firestorm across global markets, with related stocks experiencing extreme volatility ahead of the law’s August 1 implementation. The regulatory framework—Asia’s first comprehensive stablecoin regime—has created both opportunities and pitfalls for investors navigating this emerging sector.
The Hong Kong Rollercoaster
Index Turbulence
- Stablecoin Index swung from +25.8% Monday to +5% weekly close
- Lianlian DigiTech plunged 45% post-rally
- ZA Bank parent ZhongAn Online dropped 17% but remains +40% monthly
Reality Check
JD CoinChain CEO Liu Peng cautioned at a fintech forum: “Speculative fever has outpaced fundamentals.” The JD.com subsidiary—one of three sandbox participants selected by Hong Kong Monetary Authority (HKMA)—confirmed its stablecoin remains in development despite regulatory approvals.
Who’s Really Positioned to Benefit?
Sector Breakdown
- Issuers/Custodians: Future license holders (none currently operational)
- Infrastructure: Blockchain providers, security auditors
- Applications: Cross-border payment processors
“Most ‘concept stocks’ are peripheral players,” warned Zhang Jie, a Shenzhen hedge fund manager. “ZA Bank’s reserve services for stablecoin issuers won’t move the needle soon.”
ZA Bank’s Dilemma
- Bull Case: Processes fiat transactions for 200+ Web3 firms
- Bear Case: Parent ZhongAn’s core insurance biz shows unstable profits
- Red Flag: Major shareholder YouFu sold HK$182.4M stake at peak
Circle’s Wall Street Debut
The USDC issuer’s NYSE listing became a proxy for stablecoin mania:
- 168% first-day pop,$23.8B
- $599B in USDC outstanding (20% market share)
- Revenue Model: Earns spread on Treasury holdings
Financial Snapshot
| Year | Revenue | Op. Profit |
| 2022 | $772M | -$38.1M |
| 2023 | $1.45B | $269M |
| 2024 | $1.68B | $167M |
“Circle’s listing validates the asset class but doesn’t eliminate risks,” noted Zhang. “Peg stability and cyber threats remain existential challenges.”
Regulatory Crossroads
Hong Kong’s phased approach:
- Phase 1 (2025): Fiat-backed stablecoins only
- Phase 2 (2026): Algorithmic stablecoins under review
CMB International maintains optimism: “Sandbox participants will capture virtual asset flows, driving earnings.” Yet with no licensed issuers yet operational, the August deadline looms as both catalyst and reckoning for overheated valuations.
As markets digest Circle’s success and Hong Kong’s framework takes shape, investors face a critical question—whether current prices reflect sustainable adoption or regulatory arbitrage. The answer may emerge when the first HKMA-approved stablecoins actually launch.
Related topic:
