Hayes says that the next cryptocurrency bull run will be tied when China re-adopts the cryptocurrency market, and Hong Kong could be the gateway for this to happen.
Arthur Hayes, former CEO of crypto derivatives giant BitMEX, believes that the next cryptocurrency bull run will begin when China returns to the market, and Hong Kong has a significant role to play in this process.
In his Oct. 26 blog post titled “Comeback,” Hayes outlined why he believes the Hong Kong government’s announcement to introduce a bill to regulate cryptocurrencies is a sign that China is trying to get back into the market. . This could be because Hong Kong acts as “the proxy through which China interacts with the world:”
“If [China] likes crypto, the bull market will come back. It will be a slow process, but red buds are tricky.
Hayes argues that Hong Kong can become the testing ground for Beijing to experiment with crypto markets and act as a hub for Chinese capital to find its way into global crypto markets:
“If these flows really materialize as I imagine they will be a strong pillar of support for the next bull market.”
According to Hayes, the “reorientation of Hong Kong as a crypto-friendly location” is a part of Beijing’s strategy to reduce its position in a way that does not destabilize its domestic financial system.
Hong Kong was ranked the best-prepared country for mainstream crypto adoption in a Forex Suggest study published in July 2022. It takes into account various factors, such as crypto ATM facilities, pro-crypto regulations, and crypto culture. beginning.
China has one of the largest economies in the world, but has been mostly hostile to the crypto industry. The country’s first ban came in 2013 when it banned banks from handling Bitcoin.
Beijing stepped up its crypto crackdown efforts in 2021, when it carried out several regulatory operations to ban the country’s Bitcoin mining and made all cryptocurrency transactions illegal.
However, says Hayes, “China did not abandon crypto, it was just dormant.”
Related: Bitcoin Ownership Still Legal in China Despite Ban, Lawyer Says
China resumed mining operations for BTC in September 2022, and Chainalysis noted in its 2022 Global Cryptocurrency Adoption Index that China re-entered the top ten this year after ranking 13th in 2021.
The authors of the Global Crypto Adoption Index said they found the development “particularly interesting” given the Chinese government’s crackdown on cryptocurrencies, but according to their data, “the ban was either ineffective or laxly enforced.”