Chinese New Year crypto liquidity compresses; TradFi exchange buys widen access
Chinese New Year crypto trading typically slows as Asia-based desks reduce risk and settle balances, creating short, predictable periods of liquidity compression. That compression can coexist with rising interest, with Asia Express reporting that Lunar New Year boosts attention on digital assets while noting Traditional finance players buying crypto exchanges in the region.
Liquidity compression refers to thinner order books, wider spreads, and reduced depth, conditions that can exaggerate intraday moves without necessarily changing long-run positioning. When post-holiday flows resume, previously delayed orders and treasury allocations can re-enter quickly, revealing the demand that was muted during the break.
Why DTCC and Hong Kong enable Asia institutional crypto adoption
Institutional adoption in Asia hinges on regulated wrappers and recognizable market structure. As reported by Cointelegraph, Hong Kong’s Bitcoin and Ether ETFs have streamlined institutional access by placing crypto exposure inside existing compliance and portfolio workflows.
Licensing further raises the bar on controls and transparency, shaping which venues win institutional flow. “Anybody who engages in exchange licensing is going to have to commit to a very serious governance regime… It’s not for the faint-hearted,” said Jonathan Crompton, regulatory lawyer.
According to UnchainedCrypto, DTCC is being discussed alongside other major TradFi names in current conversations about institutional engagement with crypto infrastructure. The emphasis on established post-trade providers underscores that clearing and settlement alignment are prerequisites when large institutions evaluate new asset gateways.
Immediate impacts: volumes, volatility, and settlement-driven cash frictions
During the holiday window, lower active participation can reduce volumes and make price action look abrupt relative to typical turnover. Once desks return and fiat rails normalize, observable re-risking can lift volumes as backlogged decisions work through risk committees and settlement cycles.
Settlement-driven cash frictions also matter. As reported by CryptoSlate, some institutional traders have been “out of fast cash,” with capital parked in yield-bearing instruments and slowed by traditional settlement times; that dynamic can delay dip-buying and briefly amplify volatility until funds are freed.
At the time of this writing, Bitcoin (BTC) is around 68,608, with 12.30% (very high) volatility and a 14-day RSI near 37.24 (neutral). The asset shows 10 green days in the past 30 (33%), while its 50-day and 200-day simple moving averages, roughly 84,596 and 100,745 respectively, sit above spot; the headline sentiment reads bearish. These figures provide context for interpreting any post–Chinese New Year re-liquification in order books.
TradFi buying crypto exchanges: confirmed activity and access pathways
Earlier reporting indicated that some Traditional finance players are buying crypto exchanges in Asia, a development that can widen distribution and align onboarding with established compliance practices. In parallel, licensed venues in financial hubs such as Hong Kong provide familiar risk, reporting, and segregation frameworks that institutions typically require.
Based on finews.asia, a key trend has been the movement of assets from unregulated entities to regulated ones, a shift that naturally channels flow toward supervised custody and exchange infrastructure. In practice, that migration, combined with selective TradFi ownership stakes, can concentrate liquidity on compliant platforms and create clearer audit trails for institutional allocators pursuing Asia institutional crypto adoption.
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