Tencent News "Qian Wang" author, Luo Fei, reporting from Hong Kong.

After several months of turmoil caused by the cryptocurrency industry, Hong Kong has finally quieted down. When Tencent News "Qian Wang" met with Ye Yizhou in late June at an office located in the heart of Hong Kong's Central district, he expressed a preference for the current state of Hong Kong. He felt that the previous atmosphere was unreal and chaotic.

Ye Yizhou has been involved in cryptocurrency trading for over 6 years and is the head of Frontier Rational Asset Management Limited. This fund is currently the only compliant cryptocurrency hedge fund in Hong Kong and has achieved the best performance among those that have obtained virtual currency trading licenses in the city. Public information shows that there are currently 11 funds authorized to invest in virtual currencies in Hong Kong.

According to Tencent News "Qian Wang," Ye Yizhou's fund is the only one that has outperformed the market among the 11 funds. Public information reveals that Ye Yizhou's team secured the third position in Barclays' net profit ranking for cryptocurrency funds in 2022, with a net profit rate of 9.2% — a significant achievement considering the industry's widespread losses of around 50%.

By the end of 2022, the fund led by Ye Yizhou distributed approximately HKD 70 million in dividends to its limited partners (LPs).

Ye Yizhou told Tencent News "Qian Wang" that during the busiest week in Hong Kong's cryptocurrency industry in April this year, he received over 50 individuals who came to Hong Kong in search of cryptocurrency opportunities. These individuals came from countries such as the United States, the United Kingdom, mainland China, Singapore, Dubai, and others, hoping that Hong Kong could serve as a harbor for them to stay as "digital nomads."

However, Ye Yizhou believes that Hong Kong is not suitable for all individuals in the cryptocurrency industry, and it may not even be suitable for those looking to transition from traditional finance to the cryptocurrency industry. He suggests that Hong Kong is more suitable for intelligent individuals with a background in traditional finance.

Unlike most cryptocurrency traders who come from grassroots backgrounds, Ye Yizhou is a "mainstream" trader who emerged from Wall Street. He graduated from the Columbia Business School in the United States and subsequently joined Fore Research & Management, a well-known hedge fund company on Wall Street. He worked there for several years, specializing in convertible bond arbitrage trading.

In 2014, Ye Yizhou chose to return to Hong Kong and joined a local stock hedge fund company. During this time, due to personal interest, he started investing in Bitcoin at an early stage. He told Tencent News "Qian Wang" that at that time, there was no clear regulation on Bitcoin trading in the market. In 2017, he and his colleagues began to venture into large-scale Bitcoin secondary market trading. Subsequently, he left the institution and started his own business, establishing Frontier Rational Capital Limited in Hong Kong.

Ye Yizhou refers to it as the "cognitive arbitrage" of the cryptocurrency industry. In the 24/7 tradable cryptocurrency world, global traders are simultaneously trading the same assets, but their behaviors and trading logics can vary significantly. This provides professional traders with many opportunities to make profits, which are relatively fewer in traditional finance.

Unlike most veterans in the cryptocurrency industry, Ye Yizhou was among the first in Hong Kong to apply for a cryptocurrency fund license and obtained it in early 2022. His company then became the first investment institution to allow cryptocurrency multi-strategy trading investments in Hong Kong in early 2023, commonly known as a hedge fund.

Ye Yizhou told Tencent News "Qian Wang" that in addition to assessing the capabilities of fund managers, regulators also carefully investigate risk issues within multiple strategies. They focus on how to better protect the interests of investors, as well as the fund's track record and ethical behavior in trading.

According to Tencent News "Qian Wang," it has been learned that in the Hong Kong market, many funds are currently not choosing the compliant route and are not in a hurry to apply for regulatory licenses. These individuals are using their own money or funds from friends to conduct trading and are not currently seeking external fundraising. They can be considered as individual investors.

Among the approved funds in Hong Kong, only one fund, Fore Elite Flagship Fund SP, has a complete annual trading record from early 2022 to the present. Financial professional Ye Yizhou, as reported by Tencent News, and his team have firmly chosen the path of being regulated since the first day of establishment. This is because Ye Yizhou hopes that his fund can face more institutional investors. Tencent News has learned that besides Ye Yizhou himself, the funding sources of Fore Elite Flagship Fund SP also include some high net worth clients, such as Li Lin, the founder of the cryptocurrency exchange Huobi.

Ye Yizhou and his team have also been in contact with some wealthy families in Hong Kong and even some top private banks, hoping to find suitable channels for their products. Ye Yizhou told Tencent News that the current fundraising pressure is not great and tends to attract the wealthy group through institutional or family office fund products.

This may be related to Ye Yizhou's traditional financial background. In addition to being inclined towards regulation, he is more willing to deal with institutions. In his words, this is "batch" listing of products that can cover a sufficient number of wealthy individuals with demand.

According to Tencent News, these top private banks cover almost all of the wealthy resources in Hong Kong and mainland China. However, they have very strict requirements for the listed fund products, such as compliance, trading records, and reliable trading strategies. Among them, trading records generally require 3 years. Currently in Hong Kong, the longest trading record is only 1.5 years, and Ye Yizhou's fund is no exception.

If they want to enter the products listed by top private banks according to strict procedures, both Ye Yizhou and his peers need to patiently wait for a year and a half. However, Tencent News has learned that some Chinese financial institutions are also actively promoting the listing progress of cryptocurrency funds.

Some wealthy individuals in Hong Kong have expressed to Tencent News that they are indeed interested in regulated cryptocurrency funds and hope to allocate assets through institutions. Over the past few years, during the wild growth of the cryptocurrency market, these wealthy individuals have more or less participated in cryptocurrency investments, all of which resulted in losses.

Performance Update – April 2025