- Ethereum will be among the 12 cryptocurrencies that will benefit from Hong Kong’s pro-crypto move in June.
- ETH concludes may with a false positive for the bulls.
Hong Kong might be about to shake things up in the crypto world and Ethereum [ETH] will likely be among the biggest beneficiaries. China’s love-hate relationship is currently in a favorable swing and might even mark the start of the next bullish wave.
ETH might be about to catch a ride with the bull in June thanks to Hong Kong. This is because the Chinese administrative region will open its doors to retail investing for multiple top cryptocurrencies including ETH.
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The latter will likely be among the biggest beneficiaries because it already has a great head start and a robust ecosystem.
June 1st is the day that Hong Kong (with Beijing’s approval) will allow companies to apply to let retail investors buy crypto including Bitcoin, Ethereum, Polkadot, stables, and 12 other coins.
Hong Kong is China’s window on the world and is set to become a major crypto hub.
— Lark Davis (@TheCryptoLark) May 31, 2023
So, why is Hong Kong’s decision to embrace crypto important for the crypto community? Well, Hong Kong represents a gateway for Chinese liquidity to access foreign or international markets.
More importantly, China contributed a massive amount of liquidity that drove prices up during previous bull runs. Now that the same gateway is opening up to crypto once again, we will likely see a demand resurgence.
Will June be a bullish month for ETH?
The Hong Kong green light for crypto starting in June may pave the way for an influx of liquidity but it may not necessarily be immediate. However, organic strong demand may not be expected immediately since exchanges will be required to make applications for their services and be vetted in Hong Kong. This means incoming demand for ETH will more likely be gradual rather than immediate.
As far as the current state of ETH demand was concerned, there were some interesting observations. ETH’s exchange reserves have been shrinking for most of May. However, we did observe a slight uptick from 28 May.
Source: Santiment
Lower exchange supply reflected that there was significant demand even though it may not have reflected on the price. Speaking of price, ETH recently experienced a slight uptick in the last five days but it was short-lived. ETH was ending May with a resurgence of sell pressure which already ate into some of its recent gains. It exchanged hands at $1865 at the time of writing.
Source: TradingView
Despite the performance, ETH’s exchange flows suggested that it might kick off June with a surge in volatility. Especially an increase in exchange inflows which may explain the slight surge in exchange reserves at the end of May. Exchange flows cooled down significantly in May compared to April.
Source: CryptoQuant
