Is China Fueling The Next Bull Run?

Moonrock Capital
6 min readMay 26, 2023

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The tides are turning, and all eyes are on the sleeping giant in the East. Hong Kong’s securities regulator, with a stroke of approval, has given the green light to retail crypto trading. And would you believe it? Our beloved Bitcoin logo graced the screens of China Central Television during a broadcast segment on cryptocurrencies. Is this a sign? A sign that China may just be the catalyst we’ve been waiting for, propelling us into the next crypto bull run. So, without further ado, let’s dive headfirst into this intriguing possibility.

The Never Ending Story

Now, before you roll your eyes and dismiss this as just another cliché, let us tell you why China has the potential to become the ignition switch for the next explosive surge in crypto markets. China, with its colossal population and rapidly evolving technological landscape, has always been a force to be reckoned with. But now, it’s positioning itself as the ultimate catalyst for the crypto revolution.

Firstly, let’s talk about China’s insatiable appetite for innovation. From artificial intelligence to blockchain technology, China has been making giant strides in the tech arena. The government has not only embraced blockchain but has also embarked on an ambitious mission to create a digital currency of its own — the Digital Yuan. By doing so, they are not only validating the potential of cryptocurrencies but also creating a robust framework for their widespread adoption.

Furthermore, let’s not forget the colossal influence China has over the global economy. As one of the world’s largest economies, China possesses immense financial firepower. The sheer magnitude of its economic activities, both domestically and internationally, means that any move China makes in the crypto space will reverberate across the globe. Whether it’s through strategic investments, regulatory frameworks, or even a simple tweet from a prominent Chinese figure, the impact can be seismic.

But what truly sets China apart is its people. With a population of over 1.4 billion, China boasts a massive pool of crypto enthusiasts, traders, and investors. Chinese individuals have long displayed a keen interest in alternative investment opportunities, and cryptocurrencies have captured their imagination like no other. This vibrant community has the power to inject unprecedented liquidity into the crypto markets, driving prices to unprecedented heights.

However, it’s important to note that with great power comes great responsibility. China’s influence over the crypto world brings both opportunities and challenges. The government’s strict regulations and occasional crackdowns on crypto activities have created an air of uncertainty. Nevertheless, with China’s relentless pursuit of technological advancements and its ability to adapt swiftly, it’s only a matter of time before they strike the perfect balance between innovation and regulation, which is slowly but surely taking shape.

Hong Kong Securities Regulator

A possible game-changing announcement was made on May 23, 2023. The SFC, after receiving a staggering 152 submissions from industry giants, professional associations, and consultancy firms, has given the nod to its groundbreaking proposal. Licensed crypto exchanges will now have the green light to serve retail investors in the nation.

But let’s not get ahead of ourselves. To earn their rightful place in this regulatory revolution, digital asset service providers (DASPs) must demonstrate unwavering compliance with the new rulebook. Those who fail to toe the line, we’re afraid, will have to close up shop in Hong Kong. Effective June 1, 2023, the upcoming regulatory framework covers crucial aspects such as asset custody safety requirements, conflict of interest avoidance, customer asset segregation, and cyber security standards.

Now, bear in mind that the SFC hasn’t yet given the official stamp of approval to any crypto trading platform targeting retail investors. However, market giants like Huobi Global, OKX, and Gate.io have wasted no time in applying for virtual assets service provider (VASP) licenses. If these applications go through, these companies will tap into Hong Kong’s lucrative crypto market, bolster their user base, and solidify their position in the industry.

This move by the SFC marks a monumental step towards fortifying market integrity and fostering trust in the realm of digital assets. Hong Kong is firmly on its way to becoming a virtual asset hub and a technological innovation center. But that’s not all — the regulator is leaving no stone unturned when it comes to safeguarding investors. They’re implementing a comprehensive set of measures to ensure good governance practices, suitability during onboarding, enhanced token due diligence, stringent admission criteria, and transparent disclosures.

According to the SFC’s CEO, Julia Leung, these upcoming guidelines for digital asset trading platforms align with the principles of “same business, same risks, same rules.” They’re aimed at providing robust investor protection and effectively managing risks. Leung emphatically states, “Providing clear regulatory expectations is key to fostering responsible development. Hong Kong’s comprehensive virtual asset regulatory framework follows the principles of same business, same risks, same rules and aims to provide robust investor protection and manage key risks.”

There you have it, folks. The crypto landscape is about to undergo a seismic shift as Hong Kong sets the stage for a new era of responsible and regulated crypto trading. With its sights firmly set on investor protection and risk management, Hong Kong is taking giant strides towards shaping a flourishing crypto ecosystem.

Probably Nothing

Binance CEO Changpeng Zhao, ever the astute observer, has caught wind of a broadcast segment that recently aired on China Central Television, complete with none other than the Bitcoin logo prominently displayed. This is no ordinary event. Historically, when broadcasts like these hit the airwaves, they often precede bullish market trends. Now, we’re not here to make predictions or dish out financial advice, but we can’t deny the significance of this occurrence or as CZ would say: “Not saying past predicts the future. And not financial advice.”

During the segment, viewers were treated to a glimpse of a Bitcoin ATM located in Hong Kong. Picture this, my friends — a striking blue logo, impossible to miss, and a conspicuous “Buy Bitcoins” option just beckoning to eager investors. It’s a sight that sends shivers down our spines.

But that’s not all. The program didn’t stop at Bitcoin — it delved into the realm of NFTs and shed light on Hong Kong’s licensing framework for virtual asset trading platforms.

And as if that wasn’t enough, we’ve got another exciting development taking place in the eastern province of Jiangsu. Nanjing, the capital city, rolled out the red carpet for the launch of the China Metaverse Technology and Application Innovation Platform. Led by the Nanjing University of Information Science and Technology, this government-backed entity brings together a stellar lineup of academic institutions and companies invested in the metaverse across China.

Now, what’s the goal, you might ask? Simple — to harness the combined power of education and business, ramping up research efforts in all things metaverse.

And this isn’t just a one-city show. Various Chinese cities are battling it out for supremacy in the metaverse arena, and Nanjing is determined to lead the pack. They unveiled a strategic plan earlier this year, aiming to cultivate a thriving industry projected to rake in over 135 billion yuan (that’s a whopping $19.13 billion) in annual revenues by the end of 2025.

Conclusion

In conclusion, keep a close eye on China. Despite its crypto ban, things seem to be moving and its sheer size, unquenchable hunger for innovation, and unparalleled influence on the global stage make it an undeniable force to reckon with. As we venture into the next crypto bull run, expect China to emerge as a key player, unleashing a surge of interest, adoption, and investment that could send shockwaves through the crypto markets. So, buckle up and brace yourselves, for China is about to unleash the dragon and fuel the next crypto revolution.

Who We Are

Moonrock Capital is a Blockchain Advisory and Investment Firm, incubating and accelerating early stage startups since 2019.

Website: https://www.moonrockcapital.io

Twitter: https://twitter.com/MoonrockCapital

Disclaimer: None of the information contained here constitutes an offer (or solicitation of an offer) to buy or sell any currency, product or financial instrument, to make any investment, or to participate in any particular trading strategy.

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Moonrock Capital

Moonrock Capital is a Blockchain Advisory and Investment Firm, incubating and accelerating early stage startups since 2019. https://www.moonrockcapital.io