GB Market Commentary 06/04/2023
by Marcus Sotiriou
Momentum appears to be slowing in the crypto markets after an incredible rally in recent weeks. Bitcoin failed to close above the key level of $28,600 after a 10th attempt yesterday, as the level is proving to be extremely resilient. The inability to maintain momentum around this region suggests we may see lower prices in the short term, as the narrative of the temporary injection of liquidity from the Federal Reserve reaches its peak.
Pacific Insurance Investment Management Hong Kong, a leading Chinese insurance firm, has invested in two crypto investment funds in Hong Kong.
Pacific is China’s third largest state-owned insurance company and is collaborating with Waterdrip Capital to launch two blockchain investment funds.
Hong Kong is striving to become a digital assets hub, which conflicts with the negative regulatory backdrop in China, but this recent news suggests that Hong Kong’s ambitions has the backing of the mainland. In addition, China’s state-owned banks has reportedly been opening their doors to digital asset trading companies coming to the region according to an article from Bloomberg.
Sri Lanka has taken an opposing stance to digital asset trading, as last week the Central Bank of Sri Lanka (CBSL) issued a notice warning the public of “the significant risks associated with using and investing in cryptocurrency.”
The Sri Lankan monetary authority claimed “members of the public have incurred heavy losses on their crypto investments and in certain instances have also been subject to financial scams conducted through crypto-related schemes.”
The central bank also stated that they do not recognise digital asset trading as an asset class in Sri Lanka. I think it is only a matter of time until they are forced to recognise crypto as an asset class, due to the growth of the industry in the coming years, resulting in a positive feedback loop for adoption.
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