The Chinese government has been notorious for their harsh policies against Bitcoin, even making mining completely illegal in 2021 – a move that caused significant price depreciation. China has historically not been friendly to Bitcoin and the cryptocurrency space, and some industry titans such as Charlie Munger have applauded their harsh treatment of the asset class.
However, there are also reasons as to why one ought to be bullish on China’s interactions in the cryptocurrency sphere, particularly when considering their recent policies in jurisdictions such as Hong Kong.
Retail investors to be allowed to trade BTC and ETH
Hong Kong’s Securities and Futures Commission released a statement outlining that they would like to arrange a consultation in order to judge what requirements and regulations should be in place so that Hong Kong residents can legally trade crypto assets.
The SFC hasn’t yet been clear on exactly which assets they will allow to be traded, but it seems highly likely that BTC and ETH will be given the green flag, considering that they are the largest and most decentralised blockchains in the space, with the longest track records.
These proposed regulations are designed in such a way to allow retail users to trade cryptocurrencies in a regulated and compliant manner, which has excited many industry participants considering the fact that Hong Kong is such a significant financial hub.
What does this mean for crypto?
Over the last few years, specifically after the Chinese ban of Bitcoin mining in 2021, the crypto space’s locus of power seems to have shifted dramatically to the West.
At one point, 40% of all mining came from China, but the number is now in the low single digits, with states such as Texas mining more than the entire country.
A renewed Eastern interest in cryptocurrencies could prove to be hugely bullish for the value of assets, even if encumbered with burdensome regulation.
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