23/05/23

ASIA: Bitcoin gains after China signals crypto trading plan for Hong Kong.

As published on uk.finance.yahoo.com, Tuesday 23 May, 2023.

Bitcoin (BTC-USD) has risen over 2% as investors eye the ongoing stalemate over the US debt ceiling and anticipate a positive crypto move in China.

Bitcoin was trading around $27,500 (£22,175) on Tuesday, up 0.8% in the week.

The global cryptocurrency market cap stood at $1.19tn, up 1.8%.

Investors are monitoring developments in Hong Kong and China, in anticipation of a proposed plan that could permit retail investors in Hong Kong and institutional investors in mainland China to trade cryptocurrencies through Hong Kong.

The Hong Kong Securities and Futures Commission is set to reveal the consultation conclusions on retail participation at a Tuesday briefing, with a plan to launch a licensing regime for digital asset platforms on 1 June.

This move is not without controversy, given the global crypto market's turmoil in 2022 and the collapse of the FTX exchange.

Bitcoin has hovered between $26,500 and $27,500 in the past fortnight, amidst US debt ceiling talks between president Joe Biden and House leaders, according to Coingecko.

The US Treasury Department affirmed on Monday that it could only fulfil the government's financial responsibilities until 1 June without a debt limit hike, leaving a 10-day window for an agreement between White House negotiators and congressional Republicans.

Although analysts believe the risk of a US default is minimal, if it does occur it could potentially cause cryptocurrencies to plummet.

Bitcoin was given a confidence boost by co-founder of MicroStrategy (MSTR) Michael Saylor, who said that bitcoin is entering a new bull market.

He attributes this upswing to the bitcoin halving process, increased adoption, and the anticipated regulatory crackdown on the wider crypto industry, which could favour bitcoin.

Speaking to CNBC he said he foresees a shift of investor and developer interest from other blockchains to bitcoin as regulations weed out other competing cryptocurrencies.