The cryptocurrency industry is seeing a pivot towards Asia, with implications for the sector as a whole. This shift is a reversal of the exodus to the United States that occurred after China banned Bitcoin mining in May 2021. As the US regulatory climate has grown harsher, Hong Kong has begun to loosen its restrictions, leading to a possible pivot towards the region.
It is important to note that Hong Kong operates under a "one country, two systems" policy. Therefore, any loosening of regulations in Hong Kong does not directly translate to China. However, historically, Hong Kong has served as an experimental hub for policies, as any negative effects could be easily contained.
Singapore has also prematurely loosened its regulations, which has allowed it to avoid scandals like 3AC and Luna. However, the recent grilling of Temasek in parliament over their FTX holdings has likely cooled sentiment in Singapore.
The scrutiny on USDC and BUSD in the United States means that around 55 billion dollars of USD are looking for a new home as they get redeemed out of those entities. This potential shift towards Asia/Hong Kong is not necessarily bullish for the entire sector, as the overall capital within it will remain the same or lower. However, this shift will lead to sectorial dispersion, with assets that Asians prefer outperforming those that Westerners prefer.
The sectors that are likely to do well include GambleFi, Mining, Social Ponzinomics, Money Laundering, and Metaverse. GambleFi is a popular sector in Asia due to a cultural love for gambling. Mining provides passive income, and Asians have a strong addiction to passive income. Social Ponzinomics involves shilling cryptocurrency to friends, which is a common practice in Asia. Money Laundering allows people to get their Chinese yuan out of the country and convert it into Chinese yuan offshore. Lastly, the Metaverse, or digital real estate, is also likely to perform well as Asians are early adopters of virtual assets.
In conclusion, the cryptocurrency industry's shift towards Asia/Hong Kong will have nuanced implications for the sector as a whole. While it may not be bullish for the entire industry, certain sectors that appeal to Asians will outperform those that appeal to Westerners.
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Crypto's Pivot to Asia - An Implication Thesis
The cryptocurrency industry is seeing a pivot towards Asia, with implications for the sector as a whole. This shift is a reversal of the exodus to the United States that occurred after China banned Bitcoin mining in May 2021. As the US regulatory climate has grown harsher, Hong Kong has begun to loosen its restrictions, leading to a possible pivot towards the region.
It is important to note that Hong Kong operates under a "one country, two systems" policy. Therefore, any loosening of regulations in Hong Kong does not directly translate to China. However, historically, Hong Kong has served as an experimental hub for policies, as any negative effects could be easily contained.
Singapore has also prematurely loosened its regulations, which has allowed it to avoid scandals like 3AC and Luna. However, the recent grilling of Temasek in parliament over their FTX holdings has likely cooled sentiment in Singapore.
The scrutiny on USDC and BUSD in the United States means that around 55 billion dollars of USD are looking for a new home as they get redeemed out of those entities. This potential shift towards Asia/Hong Kong is not necessarily bullish for the entire sector, as the overall capital within it will remain the same or lower. However, this shift will lead to sectorial dispersion, with assets that Asians prefer outperforming those that Westerners prefer.
The sectors that are likely to do well include GambleFi, Mining, Social Ponzinomics, Money Laundering, and Metaverse. GambleFi is a popular sector in Asia due to a cultural love for gambling. Mining provides passive income, and Asians have a strong addiction to passive income. Social Ponzinomics involves shilling cryptocurrency to friends, which is a common practice in Asia. Money Laundering allows people to get their Chinese yuan out of the country and convert it into Chinese yuan offshore. Lastly, the Metaverse, or digital real estate, is also likely to perform well as Asians are early adopters of virtual assets.
In conclusion, the cryptocurrency industry's shift towards Asia/Hong Kong will have nuanced implications for the sector as a whole. While it may not be bullish for the entire industry, certain sectors that appeal to Asians will outperform those that appeal to Westerners.