- Ethereum will be one of 12 cryptocurrencies to benefit from Hong Kong’s pro-crypto movement in June.
- ETH concludes May with a false positive for the bulls.
Hong Kong is about to shake things up in the crypto world and Ethereum [ETH] will probably be one of the largest beneficiaries. China’s love-hate relationship is currently developing favorably and could even be the start of another bullish wave.
Thanks to Hong Kong, ETH may be about to take a ride with the bull in June. This is because the Chinese administrative region will open its doors to retail investment for several top cryptocurrencies, including ETH.
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The latter will probably be among the biggest beneficiaries because it already has a big head start and a robust ecosystem.
June 1 is the day when Hong Kong (with Beijing’s approval) will allow companies to let private investors buy crypto, including Bitcoin, Ethereum, Polkadot, stables and 12 other coins.
Hong Kong is China’s window to the world and will become a major crypto hub.
— Lark Davis (@TheCryptoLark) May 31, 2023
So, why is Hong Kong’s decision to embrace crypto important to the crypto community? Well, Hong Kong represents a gateway for Chinese liquidity to access foreign or international markets.
More importantly, China contributed a huge amount of liquidity that drove up prices during past bull runs. With the same gateway reopening to crypto, we are likely to see a resurgence in demand.
Will June Be A Bullish Month For ETH?
The green light for crypto in Hong Kong starting in June could pave the way for an influx of liquidity, but not necessarily immediate. However, strong organic demand cannot be expected immediately as exchanges will be required to submit applications for their services and be vetted in Hong Kong. This means that incoming demand for ETH will be gradual rather than instantaneous.
As for the current state of ETH demand, there were some interesting observations. ETH exchange reserves have been dwindling for most of May. However, we did see a slight increase from 28 May.
Source: Sentiment
The lower stock market supply reflected that there was significant demand, although this may not have affected the price. Speaking of price, ETH recently experienced a slight increase over the past five days, but it was short-lived. ETH ended May with a resurgence in selling pressure that already consumed some of its recent gains. It changed hands for $1865 at the time of writing.
Source: TradingView
Despite the performance, ETH’s exchange flows suggested it could start June with a surge in volatility. Mainly an increase in alternating inflows which could explain the slight rise in foreign exchange reserves at the end of May. Alternating currents cooled significantly in May compared to April.
Source: CryptoQuant
