Going public is undoubtedly a milestone victory for HashKey. However, when the prospectus was unveiled, the data of four consecutive years of financial losses, only 138,000 users on the trading platform, and a dismal L2 on-chain ecosystem raised a sharp question for the market: What makes this "unprofitable trading platform" viable?
If HashKey is measured solely by the metrics of a compliant trading platform or traditional internet metrics, a pessimistic conclusion will inevitably be reached. The root of the problem lies in the fact that the market is still examining a company that is essentially trying to become the financial infrastructure for digital assets in Asia using the framework of a "Web2 platform company" or a "Web3 trading platform."
If we change our perspective, all the seemingly terrible data will present a different picture. The capital market is always paying for the future, not today's financial statements. What the market is buying is not HashKey's current trading volume, TVL, or loss figures, but its greater potential for the future.
The key to understanding HashKey today lies in understanding what this possibility is.
I. Valuation Misconceptions: Compliance and non-compliance are two different worlds; whether or not to pursue quick profits is essentially a choice of business model.
Today, when we try to understand the crypto industry, there are essentially two main perspectives: one from traditional capital markets, and the other from a crypto-native perspective. Because of these different understandings of the industry, opinions on emerging companies like HashKey vary considerably.
1. Speed vs. System: Platform vs. Infrastructure
From a crypto-native perspective, HashKey is a small-scale, slow-paced, heavily invested, and not particularly impressive mid-sized trading platform.
Many offshore trading platforms have benefited from the booming crypto industry, reaping the benefits of retail traffic and high-frequency trading fees. Their growth followed a "scale first, regulation later" model, with speed and rapid, unregulated expansion at the core of their business model. When we place HashKey within this framework, it certainly doesn't look like a winner.
Objectively speaking, however, they've never been playing the same game from day one: offshore exchanges have an advantage in the present, relying on speed, arbitrage opportunities, and the business flexibility brought by regulatory gray areas. HashKey's advantage is future-oriented, serving regulated real funds such as banks, securities firms, funds, and family offices. In particular, compliance and scale were almost mutually exclusive in the early stages of Web3 development.
It's hard to imagine a regulated institution entrusting its assets to a platform without strict licensing, auditing, or risk isolation. These security and risk control systems are not built on speed, but rather through meticulous construction of compliance, architecture, and institutional design.
2. The value of time: Building a moat is not a one-day affair, and strategic accumulation also requires time.
Therefore, you can understand this: for platforms, speed is the moat; for infrastructure, time is the moat.
In the past few years, when the industry was still in a "gray area," the former naturally seemed to enjoy immense success; however, with a clearer regulatory framework, the expansion of tokenized assets, and institutional participation becoming a long-term trend, the latter are the companies that truly possess the ability to capture long-term value. Therefore, when reading HashKey's prospectus, one cannot only look at revenue, traffic, and transaction volume.
Instead, we should look at what it has accumulated in the "non-market dimension" over the past few years: it occupies the institutional entry point for licensed trading in Hong Kong; it serves as the channel for future institutional assets to enter the market; it has built the underlying structure of Asia's digital asset financial architecture; and it is betting on the tokenization wave of the next decade, rather than the traffic dividend of the previous round.
In the early stages of growth, these capabilities all manifest as investments—R&D, compliance, human resources, and management. But at a certain point, they will all transform into barriers to entry.
Ultimately, the traditional capital figures among HashKey's many shareholders will make it clear that they are not just looking at the current financial statements, but at the company's governance capabilities, sustainable business model, and its inevitability in the future financial system.
The capital market always pays for the future, not for today's financial statements. A true valuation and financial understanding of HashKey can only be truly grasped within the context of the future financial order.
II. Misinterpretation of Financial Statements: Poor-looking financial statements are inevitable, but losses are not failures, but rather the inevitable result of a strategy.
Looking only at the financial statements, HashKey's numbers do indeed look bad. But an overlooked fact is that over the past seven years, HashKey has had countless opportunities to abandon compliance, move offshore, and rapidly increase revenue. These opportunities not only existed but were also extremely tempting—lighter regulation, high leverage, high transaction frequency, and instant profits.
However, HashKey chose to refuse. This in itself is a strategy. It's not rejecting a business choice, but a business path: to create a platform that maximizes short-term profits, or to build infrastructure capable of supporting the changes in the financial system over the next few decades?
Therefore, when the prospectus was released, these financial figures did not reflect poor management, but rather were an inevitable result of the strategic choices made.
1. The time value of infrastructure: investment first, value later.
Looking at serious global financial infrastructure, including industry leaders like Coinbase, their early financial statements were far from optimistic, often showing losses for several consecutive years. The value of infrastructure is not reflected in the construction phase, but rather in its large-scale use. In other words, HashKey's losses are not simply financial losses; it represents investing in what others would need in the future.
You can afford to lose money for two or three years, but you can't bet on a model that will be eliminated by regulators in the future; you can endure a long construction period, but you can't miss out on the most certain track of putting institutional assets on the blockchain in the future.
This is the only right thing to do for infrastructure companies. HashKey chose the hardest and slowest path, but it is the only road to the future of the financial system.
2. Strategic Trade-offs: Sacrificing "speed" for "sustainability"
Offshore models pursue short-term profit maximization, but their future sustainability is highly dependent on regulatory gray areas, carrying huge uncertainties and risks. What is feasible today may be illegal tomorrow.
The HashKey model prioritizes long-term sustainability, operating within the regulatory framework. It collaborates with large institutions such as banks, securities firms, and funds to build financial channels, investing in compliance, risk control, and R&D upfront to lay the foundation for future tokenization, RWA, and compliant stablecoins. While sacrificing today's speed and profits, it gains a structural advantage that will ensure its survival over the next decade.
3. The paradox of technology investment: Why does L2 “look bleak” today?
The prospectus reveals massive R&D expenditures (over HK$556 million in 2024 alone) coupled with lackluster technological achievements. Even disregarding the exchange's own regulatory constraints, on-chain activity is also low. This seems to create a stark contrast.
However, if we only consider Ethereum L2, there are hundreds of similar competing products on the market, most of which are ghost chains. Therefore, I don't believe HashKey is investing technical resources into a completely oversupplied market. It must be building upon its own strengths to achieve asymmetric competition.
HashKey Chain's public statements reveal that its design goal from the outset was not to support high-frequency DeFi speculation by retail investors, but rather to serve institutional RWAs and the issuance of compliant stablecoins. Unfortunately, the RWA market is still in the early experimental and compliance process phase, and has not yet seen a large-scale on-chain asset rollout and trading boom. The chain's low activity level does not reflect technical deficiencies in the product itself, but rather that the institutional market it targets has not yet entered a period of explosive growth.
III. Business Model Reversal: Tokenization and Institutional Asset Entry Will Rewrite HashKey's Growth Curve
It's clear that HashKey isn't a trading platform that relies on retail transaction fees. It's betting on a longer-term, more certain, and larger-scale trend: the tokenization of traditional financial assets and the entry of institutional assets. This represents a once-in-20-year structural opportunity for global finance. Therefore, a fundamental shift in its business model is inevitable.
1. Revenue Model: From Traffic to Services
HashKey's business model is currently undergoing a fundamental reversal, shifting from the traditional "traffic monetization" model to an "infrastructure service" model. The prospectus highlights HashKey's CaaS (Content as a Service) service, a key signal of this model shift. It's not competing for retail users, but rather building on-chain infrastructure for service providers, brokerages, banks, stablecoin issuers, and wealth management institutions. HashKey's future growth trajectory will largely depend on the percentage of its global assets under management (AUM) that chooses to tokenize and trade through Hong Kong's compliant channels. Its revenue will come from custody, asset issuance, and other sources, with revenue quality and stability far exceeding retail transaction fees.
2. Strategic balance: the balance between offshore and onshore operations.
However, perhaps HashKey is well aware that infrastructure development is a lengthy and arduous process, and the growth rate of purely compliant revenue cannot support such massive investments in the short term. Therefore, a strategic trade-off must be made:
The core strategy remains focused on strengthening compliance capabilities in Hong Kong and establishing an institutional gateway. Simultaneously, in terms of short-term business balance, efforts have been concentrated on offshore exchanges in the past two years. The strategic positioning of this move is to support retail user growth, compensate for short-term revenue shortfalls, and shoulder the responsibility of international market expansion.
While adhering to the long-term strategy without wavering, we supplement our tactics through offshore exchanges. This is due to both the pressure of continuous strategic investment and practical considerations.
These choices are not without cost: the postponement of profit realization and the cost of the market's understanding of the "dual-track strategy" are real constraints that HashKey must bear.
IV. Conclusion
It's not surprising that the market scrutinizes a company preparing for an IPO with a magnifying glass, and questioning its financials is perfectly reasonable. However, the real question is: how should HashKey be viewed as a company?
Its losses are not a problem with its business model, but rather the cost of its strategic approach. The story of financial infrastructure has never been about speed, but about time.
The capital market always pays for the future. HashKey's prospectus doesn't describe today's financial situation, but rather its strategic coordinates for the next ten years. If the past story belonged to trading platforms and traffic, then the future story will belong to compliance gateways, institutional infrastructure, and tokenized financial systems. And when this era truly arrives, all the seemingly "ugly" numbers today will become the necessary background for understanding HashKey.
To truly understand HashKey, we need to look beyond today and into the future. Its true value lies not in the present, but in the next chapter of history. The market, however, never listens to stories alone; it will ultimately validate everything with data. The next few years will be a period in which HashKey must provide its answers.
