Towards the end of May, crypto prices rose somewhat following news that Hong Kong would permit retail trading and move in the opposite direction of its mainland countrymen.
Hong Kong Says “Yes” to Crypto Trading
Bitcoin, for example, which had been trading in the mid-$26,000 range for several weeks, eventually shot beyond the $27K mark for the first time in a while, while Ethereum – which had fallen into the $1,700 range – shot up to about $1,850.
The jumps arrived after the Securities and Futures Commission in Hong Kong said it would allow all retail traders interested in crypto to trade a certain number of digital assets beginning in June, though they would have to do so through registered platforms. The news is a huge step in an alternate direction given China became highly anti-crypto roughly two years ago.
In 2021, China shocked the world when it decided that per new regulations set forth by Beijing, all crypto and bitcoin mining would be fully illegal, and all mining facilities would have to be shut down. The move was designed to make the country less polluting and ensure stronger climate regulations were in place.
It was a very surprising statement given that China, at that time, was home to well over 60 percent of the world’s mining facilities. Thus, China was set to lose a lot of money within a short period, but this didn’t seem to bother regulators. In fact, they eventually took things a step further and announced that all crypto trading activities would also be illegal. Nobody could engage in crypto transactions, and if they were caught doing so, they would either pay a fine or go to prison for their actions.
Hong Kong, however, has long sought to decipher itself from the Chinese mainland. The region has worked hard to gain independence, and this is just another stick in the side of China as the area has refused to turn away from crypto the way the mainland has. Noelle Acheson – economist and author of the crypto newsletter “Crypto is Macro Now” – announced in an interview:
This news doesn’t mean that a flood of retail buying power will enter the market at the beginning… We could see some volume uptick… however.
Trying to Be the Next Big Hub
Owen Lau – an analyst at Oppenheimer – also threw his two cents into the mix, commenting that Hong Kong is being “pretty aggressive” when it comes to working towards crypto hub status. He said:
It will continue to capture the attention of the community and attract more firms to set up offices in Hong Kong. It is hard to gauge the exact impact, but it has a long-term effect on capital flow and talent movement.
The Securities and Futures Commission has already licensed two digital currency companies.
