In-depth Analysis of HashKey's Prospectus: Why Stepping Outside Traditional Perspectives is Necessary to Understand the Strategic Value Behind It

Original Title: In-Depth Analysis of HashKey's Prospectus: Why Breaking Away from Traditional Perspectives is Necessary to Understand the Strategic Value Behind It

Original Author: Luccy

Source:

Reprint: Mars Finance

The listing is undoubtedly a milestone victory for HashKey. However, when the prospectus unveiled its contents, the continuous financial losses over four years, a mere 138,000 users on the trading platform, and the bleak data of its L2 ecosystem raised a sharp question in the market: what qualifies this “unprofitable trading platform”?

If we only use a compliant trading platform or traditional internet metrics to measure HashKey, these metrics will inevitably lead to a pessimistic conclusion. The root of the problem lies in the fact that the market is still viewing a company that is essentially trying to become the financial infrastructure for digital assets in Asia through the framework of “Web2 platform companies” or “Web3 trading platforms.”

If you switch to another coordinate system, all the seemingly bad data will present a different picture. The capital market is always paying for the future, not today's financial statements. The market is not buying HashKey's current trading volume, TVL, or loss figures, but rather the greater possibilities of the future.

What exactly is this possibility? This is the key to understanding HashKey today.

1. Misconceptions about Valuation: Compliance and Non-compliance are two different worlds. The choice of whether to pursue quick money is essentially a decision about the business model.

Today, we will understand the cryptocurrency industry, which actually has two typical perspectives: one comes from the traditional capital market; the other comes from the native perspective of cryptocurrency. Due to the different understandings of the industry, there are divergent views on emerging companies like HashKey.

1. Choice of Speed and System: Platform VS Infrastructure

From the perspective of crypto natives, HashKey is a medium-sized trading platform that is small in scale, slow in pace, requires a relatively large investment, and has data that is not very appealing.

Offshore trading platforms have enjoyed the retail traffic dividends and high-frequency trading fees brought by the booming development of the crypto industry. Their growth follows a model of scaling first and regulation later, with the core of their business model being speed and wild growth. When we place HashKey in this coordinate system for comparison, it certainly “does not look like a winner.”

But objectively speaking, it has not been playing the same game from day one: the advantage of offshore exchanges lies in being present-focused, relying on speed, arbitrage opportunities, and the business flexibility brought by regulatory gray areas. The advantage of HashKey is future-oriented, aiming to serve regulated real funds such as banks, brokerages, funds, and family offices, where compliance and scale are almost mutually exclusive in the early stages of Web3 development.

It is hard to imagine that a regulated institution would entrust assets to a platform that lacks a strict licensing system, audits, and risk isolation. These security and risk control systems are not built up by speed, but are constructed bit by bit through compliance, architecture, and institutional design.

2. The value of time: A moat is not built in a day, and strategic accumulation also requires time.

So 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 the “gray period”, the former naturally appeared to be boundless; however, with the regulatory framework becoming clearer, the scale of tokenized assets expanding, and institutional entry becoming a long-term trend, the latter is the type of company that truly possesses the ability to capture long-term value. Therefore, when looking at HashKey's prospectus, one cannot just focus on revenue, traffic, and trading volume.

And to see 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 undertakes the channel for future institutional asset entry; it constructs the underlying framework for the Asian digital asset financial architecture; it bets on the wave of tokenization in the next decade, rather than the traffic dividend of the previous round.

These capabilities, in the early stages of growth, are all manifested as investments - in research and development, compliance, human resources, and management control. However, at a certain point in time, they will all be reversed into barriers.

Ultimately, we will understand from the traditional capital presence of numerous shareholders of HashKey: they are not just looking at the current financial statements, but also at the company's governance capabilities, sustainable business model, and inevitability in the future financial system.

The capital market always pays for the future, not for today's reports. The true valuation and financial understanding of HashKey must also be placed within the future financial order to be truly understood.

2. Misreading of finances: Unattractive reports are inevitable, but losses do not equate to failure; rather, they are a necessary result of strategy.

If we only look at the financial reports, HashKey's numbers do indeed look bad. But one overlooked fact is that over the past seven years, HashKey has had countless opportunities to abandon compliance, turn to offshore operations, and rapidly increase revenue. These opportunities not only exist but are also highly tempting—light regulation, high leverage, high trading frequency, and instant profits.

However, HashKey chooses to refuse. This itself is a strategy. What it refuses is not a business choice, but a business path: to be a platform that maximizes short-term profits, or to be an infrastructure that can support the changes in the financial system for decades to come?

Therefore, when the prospectus comes out, these financial data do not reflect poor management, but rather the inevitable result of strategic selection.

1. The time value of infrastructure: investment first, value later

Looking at the serious financial infrastructure globally, including industry leaders like Coinbase, their early reports are hardly optimistic, mostly showing continuous losses over several years. The value of infrastructure is not reflected during the construction period, but rather after it has been widely used. In other words, HashKey's losses are not simply about losing money; it's about investing in the future needs of others in advance.

You can incur losses for two or three years, but you cannot bet on a model that will be eliminated by regulation in the future; you may go through a long construction period, but you cannot miss the most certain track of institutional assets going on-chain in the future.

This is the only correct approach for infrastructure companies. HashKey has chosen the hardest and slowest path, but it is the only major road leading to the future of the financial system.

2. Strategic Trade-offs: Sacrificing “Speed” for “Sustainability”

The offshore model seeks to maximize short-term profits, but its future sustainability heavily relies on the regulatory gray area, which carries immense uncertainty risk; it may be feasible today, but it might not be legal tomorrow.

HashKey's model seeks long-term sustainability, developing sustainably within the regulatory framework, and building financial channels in collaboration with large institutions such as banks, brokerages, and funds. It invests in compliance, risk control, research and development costs in advance, laying the foundation for future tokenization, RWA, and compliant stablecoins. Although it sacrifices today's speed and profits, it exchanges them for a structural advantage that will not be eliminated in the next decade.

3. The Paradox of Technical Investment: Why Does L2 “Look Bleak” Today?

According to the massive R&D expenditure disclosed in the prospectus (over HKD 556 million in 2024 alone) and the dismal technological results, aside from the limited regulation of the exchange itself, on-chain activity is also not high. This seems to create a contrast.

However, if we only consider Ethereum L2, there are currently hundreds of similar competitors on the market, most of which are ghost chains. Therefore, I don't believe HashKey would invest technical resources to enter a completely oversupplied track. It must be based on its own advantages to build asymmetric competition.

From the external promotion of HashKey Chain, it can be seen that its design goal from the very beginning was not to support high-frequency DeFi speculation for retail investors, but to serve institutional RWA and compliant stablecoin issuance. Unfortunately, the RWA market is still in the early experimental phase and the compliance process is still being worked through, and has not yet welcomed a large-scale on-chain asset influx and trading explosion. The low activity on the chain does not reflect technical defects of the product itself, but rather that the targeted institutional market has not yet entered a phase of traffic explosion.

3. The reversal of the business model: tokenization and the entry of institutional assets will rewrite HashKey's growth curve.

It is evident that the current HashKey is not a trading platform that relies on retail trading fees for its revenue. It is betting on a longer cycle, higher certainty, and a much larger trend: the tokenization of traditional financial assets and the entry of institutional assets. This is a structural opportunity that occurs once in 20 years in global finance. Therefore, there will inevitably be a fundamental shift in the business model.

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. In the prospectus, HashKey emphasizes its CaaS services, which is a hallmark signal of this model shift. It is not competing for retail users, but rather building on-chain infrastructure for service agencies, brokerages, banks, stablecoin issuers, and wealth management institutions. The future growth curve of HashKey depends more on the proportion of global assets under management (AUM) that choose to tokenize and trade through compliant channels in Hong Kong. Its revenue will come from custodial services, asset issuance, etc., with revenue quality and stability far exceeding retail trading fees.

2. Strategic Balance: Balance between Offshore and Onshore

However, perhaps HashKey is well aware that the cycle of infrastructure development is too long and arduous, and the pure compliance revenue growth rate is difficult to support the huge investment in the short term. Therefore, strategic trade-offs must be made:

The core strategy remains focused on strengthening Hong Kong's compliance capabilities and creating an institutional entry point. At the same time, in terms of short-term business balance, efforts have been made in offshore exchanges over the past two years. The strategic positioning of this initiative is to bear the responsibility for retail user growth, make up for short-term revenue, and take on the important task of expanding into international markets.

On the basis of unwavering long-term strategy, tactics are supplemented through offshore exchanges, which not only involves the pressure of continuous strategic investment but also practical considerations.

These choices come at a cost: the delay in profit realization and the understanding costs of the “dual-line strategy” are real constraints that HashKey must endure.

IV. Conclusion

It is not surprising that the market scrutinizes a company planning to go public with a magnifying glass, and doubts about its finances are quite reasonable. However, the real question is: what kind of company should HashKey be considered as?

Its losses are not a problem of the business model, but rather the cost of the strategic route. The story of financial infrastructure has never been about speed, but about time.

The capital market is always paying for the future. What’s written in HashKey's prospectus is not today’s financial status, but the strategic coordinates for the next ten years. If the past story belongs to trading platforms and traffic, then the future story will belong to compliance entry points, institutional infrastructure, and a tokenized financial system. And when this era truly arrives, all the seemingly “ugly” numbers today will become the necessary background for understanding HashKey.

Understanding HashKey requires us to step out of today and look toward the future. Its true value has never been in the present, but in the next chapter of the era. However, the market never solely listens to stories; it ultimately verifies everything with data. The coming years are a period in which HashKey must deliver answers.