Trump Election Victory Fuels Optimism for Cryptocurrency and Web3 in China

Donald Trump’s triumph in the 2024 US presidential election has elated China’s cryptocurrency community, who expect a bright future for digital assets and related policies on the mainland and Hong Kong, as bitcoin prices hit a record high.

Trump’s pro-crypto stance is expected not only to invigorate the US virtual-asset industry, but also to encourage Hong Kong to further relax its own virtual-asset policies in its quest to become a global Web3 hub, said Livio Weng, chief executive of Hong Kong-based cryptocurrency trading platform HashKey Exchange.

This shift could also positively influence regulatory attitudes toward virtual assets in mainland China, he added. That reflects the enthusiasm of many Mandarin-speaking crypto-focused users on Elon Musk’s X, as they posted their congratulations to Trump on the social-media platform formerly known as Twitter, while also extolling a new all-time high reached by bitcoin on Wednesday, with some expressing good days ahead for the industry.

At one point on Wednesday, bitcoin prices reached above US$75,000, having gained more than 66 percent since the start of this year. Once a cryptocurrency critic, Trump in July vowed during his campaign that the US would become the “bitcoin superpower of the world” under his administration and that he would fire on day one Securities and Exchange Commission chair Gary Gensler, who ramped up scrutiny of the crypto sector.

Hong Kong’s three exchange-traded funds (ETFs) that directly invest in bitcoin saw about HK$97.69 million (US$12.57 million) change hands across Hong Kong dollar, US dollar and yuan counters, representing the biggest trading volume in more than a month. The Hong Kong government in late 2022 declared its ambition to turn the city into a virtual-asset hub as the US cracked down on the cryptocurrency industry.

Over the past two years, local authorities rolled out a slew of initiatives to boost the sector, while ensuring investor protections. Still, the looming support for digital assets in the US has recently taken some wind out of Hong Kong’s virtual-hub sails.

Spot cryptocurrency ETFs in the US have attracted more interest than similar products in Hong Kong. Hong Kong regulators may speed up virtual-asset approvals in the face of increased competition from the US, HashKey’s Weng told the Post in August.

Meanwhile, more experts have called on Beijing to review its rigid ban on crypto businesses on the mainland. A professor at the Hong Kong University of Science and Technology in July said banning crypto mining in China was “very unwise,” as it drove related businesses to the US, contributing to US tax income.