On Tuesday, cryptocurrency prices moved higher after Hong Kong’s securities regulator announced it would allow retail trading for some crypto assets, beginning June 1.
According to coin metrics, Bitcoin rose 1.7% to $27,293.64. Throughout May, the largest cryptocurrency has been trading in a short range, struggling to achieve $30,000 but standing at around $25000. Simultaneously, Ether advanced nearly 2% to $1851.91.
Last Monday night, SFC announced that retail trading will be licensed for certain cryptocurrencies on registered trading platforms from next month. However, this move was highly expected after a discussion that took place in February.
The new guidelines are being developed with the idea of making Hong Kong a global crypto hub. In 2021, there was a contrast of thoughts between Hong Kong and China for not promoting it, as a result, crypto activities were banned. In addition, after the collapse of FTX, the U.S. is facing hostility from the regulators.
“This news doesn’t mean that a flood of retail buying power will enter the market at the beginning of June. … We could see some volume uptick in June, however,” said Noelle Acheson, economist and author of the “Crypto is Macro Now” newsletter.
SFC is taking every opportunity and they have already issued licenses to two platforms, OSL and Hash Blockchain. As per Acheson, some of them have actively started working offshore.
Owen Lau, an analyst at Oppenheimer, said that Hong Kong is making aggressive attempts to become a crypto hub.
“It will continue to capture the attention of the community and attract more firms to set up offices in Hong Kong,” he said. “It is hard to gauge the exact impact but it has a long-term effect on capital flow and talent movement.”
At present, the price movement is small, and the news will come out when catastrophic events such as big catalysts or trading hit a lull. Moreover, investors will look forward to the debt ceiling negotiations and rate hike expectations moving up. Bitcoin started behaving as a risk asset, as it was commencing trading more in tandem with gold.
Bitcoin and Ether are on their way to witnessing the worst month of 2023, down 7.6% and 3.1%, respectively. Bitcoin is down 4.5% for the quarter, after finishing the first quarter up 71%. Ether is up 1% after it posted a 52% gain in Q1.
- Published By Team Hongkong Journalist