BEIJING, Saturday, July 20, 2024 – Experts predict China may reverse its cryptocurrency ban within three months, marking a significant shift in the country’s stance on digital assets. This speculation follows Hong Kong’s progressive moves, including the approval of Bitcoin exchange-traded funds (ETFs).
China’s initial crackdown on cryptocurrencies began in September 2017 with strict regulations on Initial Coin Offerings (ICOs), effectively shutting down crypto exchanges to mitigate financial risks and curb illegal activities.
Environmental concerns about Bitcoin mining further intensified this crackdown in 2021, leading to the closure of major mining operations and prompting miners to relocate to countries with more favorable regulations.
This migration caused a temporary drop in Bitcoin’s hash rate and market fluctuations.
Hong Kong’s recent approval of spot Bitcoin and Ether ETFs, set to begin trading on April 30, 2024, could influence mainland China’s cryptocurrency policy. The Hong Kong Securities and Futures Commission’s decision positions Hong Kong as the first Asian financial hub to embrace cryptocurrencies as mainstream investment tools. This move might prompt China to reconsider its ban, seeing an opportunity to re-engage with the crypto market.
The success of these ETFs could demonstrate the potential for regulated and compliant cryptocurrency investment, addressing China’s concerns about financial stability and illegal activities. Additionally, the positive reception of spot Bitcoin ETFs in the United States, which have seen significant net inflows, may also influence China’s decision.
China’s re-evaluation of its crypto policy could reshape the global cryptocurrency market, potentially reversing the effects of its previous bans. The outcome remains uncertain, but the developments in Hong Kong signal a possible shift in China’s approach to digital assets.
