As the 2024 USA presidential election approaches, the global crypto market's sensitivity to political trends has reached an unprecedented level. Last month, due to Trump's lead in several gambling websites and prediction markets, expectations of his election as president quickly increased, driving a strong rise in bitcoin, with the price once surpassing $70,000, approaching this year's historical high. This surge shows the market's high sensitivity to policy changes and also makes people more concerned about the potential impact of the USA elections on the crypto market, as well as Hong Kong's strategic significance in this era.

The Impact of the USA Presidential Election on the Crypto Market

There has been a dramatic scene between the USA presidential election and the crypto market this year. In the early years, Trump was not a supporter of Bitcoin, but in the 2024 election, his attitude towards cryptocurrencies changed significantly. At the 2024 Bitcoin Conference, Trump publicly expressed his desire to turn the USA into the 'global capital of cryptocurrencies and bitcoins.' This statement not only indicates his recognition of the crypto industry but also suggests that the USA may promote the adoption of crypto assets through policy measures.

Trump's support may also influence more traditional financial decision-makers who had conservative or skeptical views on Bitcoin. Trump's approval may prompt them to reassess the potential of crypto assets, further promoting the acceptance of cryptocurrencies in mainstream finance. This demonstration effect will not only accelerate the development of the crypto industry but may also trigger a shift of traditional capital to the virtual asset market.

On the other hand, Harris also displayed a friendly attitude towards the crypto industry in her speech, mentioning that she wants to 'encourage innovative technologies such as artificial intelligence and digital assets, while protecting our consumers and investors,' demonstrating the Democratic Party's supportive stance on the crypto sector.

The reason why both Trump and Harris are friendly towards the crypto industry is, from a very practical perspective, the USA has over 30 million crypto users, a massive force that cannot be ignored in presidential elections. More importantly, regardless of whether the Republicans or Democrats are in power, they all hope to achieve the historic achievement of leading the Web3 technology revolution.

In 2022, USA congressmen clearly stated how to ensure that the Web3 revolution happens in the USA. Cryptocurrencies will become a national strategic asset for the USA, basically a consensus among the USA elite. Previously, Bitcoin ETFs had been rejected for many years, but at the end of last year and this year, Bitcoin and Ethereum ETFs were successively approved. The deeper reason behind this is that the USA has keenly realized the crucial significance of leading the development of Web3.

Web3 is not just a technology-driven financial revolution, but also a global paradigm shift. Therefore, I believe that regardless of who becomes the next USA president, the support for Web3 will remain strong, as opposing it would be against the historical trend.

Although the Republican and Democratic parties have consistent positions of support in the cryptocurrency industry, they may take different paths in actual governance. If Trump wins, US regulatory agencies may relax control over the cryptocurrency industry, provide more policy support, and may also stimulate the activity of the virtual assets market by expanding the budget; conversely, if Harris is elected, she may adopt a more balanced strategy, encouraging innovation while also focusing on investor protection. Although Harris's policies may be slightly conservative, this cautious attitude will not hinder the cryptocurrency market, but rather provide a stable environment for market development.

However, from the perspective of market sentiment, Trump's victory will bring a more positive boost to the cryptocurrency market, while Harris's election may lead to increased short-term price volatility. These market reactions reflect the impact of different political leaders' policies on investor psychology, and in actual development, the growth of the cryptocurrency industry should focus more on long-term infrastructure development and regulatory environment improvement.

Global competition for dominance in Web3.

As the US presidential election approaches, although Trump and Harris have different short-term policy impacts on the cryptocurrency market, both parties are aware of the strategic importance of Web3 development and strive to achieve a global leading position in this field. However, not only the United States, but also other major economies and emerging markets globally are accelerating their deployment in Web3, aiming to secure a place in this transformation.

The EU has established a more systematic layout through the Markets in Crypto-Assets Regulation (MiCA). The introduction of MiCA not only provides clear legal protection for European market participants but also promotes policy coordination and market standardization among member states. Europe hopes to consolidate its core position in the Web3 ecosystem through MiCA, providing sufficient policy support to drive innovation.

Since the UK government released the "Digital Assets Strategy" in 2022, the Treasury and the Financial Conduct Authority (FCA) have successively introduced a series of supportive policies to ensure the conditions for digital asset innovation while protecting consumers. The Financial Services Agency of Japan (FSA) has been relatively relaxed in regulating cryptocurrencies in recent years, encouraging domestic financial institutions to explore more in blockchain and Web3 technologies. The Monetary Authority of Singapore (MAS) has implemented a series of support policies, including tax incentives, innovation labs, and funding support, aiming to shape Singapore as the Web3 and FinTech hub of Asia by creating a friendly business environment. Dubai is also actively building its competitive advantage in the Web3 field. The UAE government has launched the "Blockchain Strategy" to drive economic diversification and attract global Web3 enterprises.

Bermuda, Nigeria, and other regions are also working to create crypto-friendly policies to attract Web3 enterprises. For example, Coinbase has obtained the fourth license in Bermuda, and HashKey has obtained the fifth license in the region, demonstrating Bermuda's rapid development in the Web3 field as an emerging market.

In the past, the rules of the global crypto market were mainly set by a few large economies, leading to the emergence of regulatory arbitrage. Today, as more countries gradually improve their compliance policies, this phenomenon is disappearing. In the future, licensed operations, compliance with regulations, and safeguarding customer asset security will become mainstream in the crypto industry. HashKey is actively acquiring licenses from around the world and plans to surpass Coinbase in the licensed exchange field in the next five years, creating the world's largest cluster of licensed exchanges.

In general, the development of Web3 has become a global consensus. Countries are actively participating in this emerging field's competition through policies and regulatory means to promote technological innovation and drive economic growth.

Hong Kong, with its geographical location, economic environment, and policy support, plays a crucial role in this competition. As a financial center in Asia and a bridge between East and West, Hong Kong's development in the Web3 track not only affects regional economic transformation but also plays a crucial driving role in building the global Web3 ecosystem.

Strategic Positioning and Gateway Role of Hong Kong in the Web3 Field

As a global financial center, Hong Kong is actively positioning itself as a global hub for Web3 development based on its unique geographical, policy, and economic advantages. The Hong Kong Special Administrative Region Government's Policy Statement on the Development of Virtual Assets in Hong Kong clearly states the goal of making Hong Kong a global hub for digital assets. This policy demonstrates Hong Kong's foresight in the Web3 field, aiming not only to consolidate its status as a regional innovation center but also to occupy a core position in the global digital asset ecosystem. In June 2023, the Securities and Futures Commission (SFC) of Hong Kong further implemented a licensing regime for virtual asset service providers to promote the standardized development of the industry and establish higher regulatory standards.

The introduction of this series of policies has laid a solid legal foundation for the development of Web3 in Hong Kong and also demonstrates Hong Kong's leadership in the global trend of compliance. Through a clear regulatory framework, Hong Kong not only provides reliable security guarantees for investors but also gives international businesses more confidence to operate in Hong Kong. This prudent and proactive regulatory strategy has made Hong Kong an important gateway for global capital inflows into the Web3 field.

The development of Web3 in Hong Kong relies not only on its advanced financial infrastructure and robust legal system but also on comprehensive ecosystem support. By integrating financial technology with Web3 enterprise resources, Hong Kong provides abundant resource support for startups and technology teams and builds a platform for cross-disciplinary cooperation, boosting the diversification and sustainable development of the Web3 ecosystem.

Hong Kong's layout is not a short-term strategy but a strong support for long-term Web3 innovation and global talent accumulation. As a bridge connecting East and West under the policy framework of "one country, two systems," Hong Kong has a unique position and can attract international capital and technology to Hong Kong while utilizing technical support from mainland China, providing multiple guarantees for the expansion of the global Web3 market. Hong Kong is not only a bridgehead between China and the international market but also can play a connecting and leading role in future technological cooperation and innovative development.

This two-way circulation mechanism places Hong Kong's strategic position in the global Web3 layout not only limited to local market services but also in its role as a gateway. In the process of connecting the East Asian market and international companies, Hong Kong provides a compliant and secure channel, becoming an indispensable core hub in the Web3 ecosystem that other regions find difficult to replace.

Conclusion

Regardless of whether Trump or Harris is elected as the President of the USA, the USA will continue to support the development of Web3 technology. It can be seen that multiple countries and regions globally, including the EU, the United Kingdom, Japan, Singapore, and Dubai, are actively laying out Web3 in order to gain an advantage in global competition.

Hong Kong, with its unique geographical location and policy advantages, is positioning itself as a hub for global Web3 development. Hong Kong's strategic position in the Web3 field lies not only in its traditional role as a financial hub, but also in its role as a bridgehead connecting China and global markets. With the increasing global emphasis on Web3, Hong Kong is expected to become a key force driving the global construction of the Web3 ecosystem.

Source: HashKey Group COO & HashKey Exchange CEO, Livio Weng