Hong Kong could be key for China’s crypto comeback: Arthur Hayes

Arthur Hayes, the erstwhile CEO of crypto derivatives elephantine BitMEX, believes the adjacent crypto bull tally volition commencement erstwhile China moves backmost into the market, and Hong Kong has a captious portion to play successful this process. 

In his Oct. 26 blog post titled "Comeback", Hayes outlined wherefore helium thinks the Hong Kong government's announcement astir introducing a bill to modulate crypto is a motion China is trying to easiness its mode backmost into the market. This could beryllium due to the fact that Hong Kong acts arsenic “the proxy done which China interacts with the world."

“When China loves crypto, the bull marketplace volition travel back. It volition beryllium a dilatory process, but the reddish shoots are budding.”

Hayes argued that Hong Kong whitethorn go the investigating crushed for Beijing to experimentation with crypto markets and enactment arsenic a hub for Chinese superior to find its mode into the planetary crypto markets.

"If these flows really materialize successful the mode I imagine, they volition beryllium a beardown supporting pillar of the adjacent bull market.”

According to Hayes, Hong Kong’s “reorientation arsenic a pro-crypto location” is simply a prong successful Beijing's strategy to trim its presumption successful a mode that won't destabilize its interior fiscal system.

Hong Kong was ranked the best-prepared state for widespread crypto adoption successful a survey by Forex Suggest published successful July 2022. It considered respective factors similar crypto ATM installations, pro-crypto regulations, and startup culture.

China has 1 of the largest economies successful the satellite but has been mostly hostile toward the crypto industry. The country's archetypal prohibition came mode backmost successful 2013 erstwhile it prohibited banks from handling Bitcoin (BTC) transactions.

Beijing ramped up its crypto crackdown efforts successful 2021 erstwhile it carried retired aggregate regulatory operations to eradicate Bitcoin mining from the state and deemed each crypto transactions illegal.

However, Hayes says "China has not near crypto — it has conscionable been dormant."

Related: Possession of Bitcoin inactive ineligible successful China contempt the ban, lawyer says

China did resume BTC mining operations successful September 2022 and Chainalysis noted successful its 2022 Global Crypto Adoption Index that China re-entered the apical 10 this twelvemonth aft placing 13th successful 2021.

The authors of the Global Crypto Adoption Index said they recovered the improvement "especially interesting" fixed the Chinese government's crackdown connected crypto, but according to their data, "the prohibition has either been ineffective oregon loosely enforced."