Nice Monday. Recently, while the US is off for President’s Day, bitcoin traded at $24,226 and ether at $1,689, both down nearly 2% and 1.5% respectively over the past 24 hours as Asia begins the workweek.
Over the past week, bitcoin is up over 11% while ether is up 9%. Layer 1s like Solana, Polkadot, and Polygon have also posted double-digit gains, up 20%, 19%, and 18.5%, respectively.
DOGE is up 5% on the week and SHIB is up 4% after their gains were tested by the market by an Elon Musk tweet last week. Floki, named after Musk’s dog, is down 7% on the day but still up 108% on the week.
Joe DiPasquale, CEO of crypto fund manager BitBull Capital, says that $23,000 is Bitcoin’s new support level and next week is crucial if Bitcoin is to hit $30,000.
“It was critical for Bitcoin to reclaim $23,000 if we were to see further upside,” he told CoinDesk in a note. “As February draws to a close, another bullish monthly close may be what the market needs for Bitcoin to test $30,000.”
DiPasquale believes the market will consolidate, if not rise, with limited short-term downside.
Let’s see if crypto’s bullish rally can hold.
No, Hong Kong will not give retailers access to crypto on June 1st
Hong Kong is warming up to crypto, and on June 1st a licensing scheme for Virtual Asset Service Providers (VASP) – the local term for crypto exchanges – will begin.
Does this mean crypto will be “perfectly legal” for everyone in town, as one tweet suggests? Not at all.
While the situation may change later, the VASP license exchange framework, which has just completed a multi-year consultation, allows access only to accredited professional investors for the time being. Retail investors are excluded.
The Hong Kong government has indicated that the Securities and Futures Commission (SFC), its securities regulator, may consider allowing retail client access to virtual asset services in the future after further consultation.
In January, Portal reported that the SFC is in the process of evaluating which cryptocurrencies to offer to retail investors should the door eventually be opened to them. CEO Julia Leung is quoted as saying only “highly liquid” assets will make the list and the choice will be very limited at first.
The city administration sees June 1st as an opportunity, because “Brand Hong Kong” enjoys a much higher reputation worldwide than, for example, the Seychelles or St. Kitts and Nevis. The regulator is expanding its staff to handle an expected flood of license applications.
“We are able to bring investments together globally,” Christopher Hui, Secretary of Financial Services and the Treasury Department (FSTB), said in a previous interview with CoinDesk. “We can manage and channel these investments well and also sustainably.”
Hong Kong’s credibility stems from its “rule of law, regulation, commercial approach,” Hui said, and this translates well from traditional finance to crypto.
However, others in Hong Kong see it differently.
“For those platforms that operate outside of Hong Kong, we see little incentive to incorporate in Hong Kong, set up an office here, go through the strict licensing requirements as the local market is small,” said Leo Weese, co-founder of Bitcoin Association of Hong Kong, wrote in a 2021 post. “Local institutional investors will be able to interact with overseas platforms through their overseas affiliates.”
Nevertheless, he is optimistic that the new regulations “can bring clarity and stability again after years of uncertainty,” Weese said in an interview. “It is important that individuals have the easy access to Bitcoin that they have become accustomed to over the past 12 years.”
These individuals, the retail investors, will surely be excited at the opportunity to use a local Hong Kong office to trade. Finally, Hong Kong has no capital gains tax and Japan shows what happens when retail investors are allowed to trade in a regulated environment. Post FTX, Japanese traders appear to be living in a parallel world where their tokens have been held with a custodian and funds are being returned.
But it’s not yet the turn of retail investors in Hong Kong. This is a work in progress.
The US Securities and Exchange Commission on Thursday sued Terraform Labs, the company behind the failed stablecoin TerraUSD, and its co-founder Do Kwon. Coinbase Chief Policy Officer Faryar Shirzad and former CFTC Chairman Timothy Massad intervened when the SEC alleges that Terraform and Kwon misled investors on a number of issues. Also, Arca research lead Katie Talati reacted to Bitcoin’s (BTC) decline after hitting its highest level since August.