- Chinese cryptocurrencies including Filecoin, VeChain, and Tron have lost an average of 16% in August 2023.
- The Chinese narrative surrounding Hong Kong’s crypto adoption has failed to pump the tokens.
- The future of these tokens remains unclear amid uncertainty surrounding China’s stand on crypto.
Cryptocurrencies based in or associated with China remain among the most closely followed by the crypto community. These crypto tokens were widely anticipated to rally this month, following the approval of retail crypto trading licenses in Hong Kong. However, the Chinese narrative appears to have had little impact on the Chinese crypto tokens.
On August 3, 2023, the Hong Kong Securities and Futures Commission (SFC) granted the city-state’s first-ever crypto exchange licenses for retail trading. The move was expected to trigger a bull run for several Chinese crypto coins including Neo (NEO), Filecoin (FIL), VeChain (VET), Tron (TRX), and Ontology (ONT).
Crypto traders and experts cited a simple thesis for their anticipation: Being a special administrative region of China, Hong Kong’s acceptance of retail crypto trading would be bullish for Chinese crypto tokens. However, come August 3, a rather negligible surge was witnessed in the prices of the above-mentioned tokens.
Data from CoinMarketCap shows that NEO, FIL, VET, TRX, and ONT have declined by an average of 16% since the beginning of August. Apart from TRX, all the Chinese crypto tokens mentioned above are trading at six-month lows. The Chinese cryptocurrencies have lost more than $1.9 billion in market capitalization over the past six months.
Apart from Hong Kong’s crypto adoption, China’s stance on crypto remains an influential element of the Chinese narrative. This includes cash injection of billions of yuan into the Chinese economy through stimulus packages, as well as a friendlier regulatory environment for the crypto industry. The impact of the stimulus injection was witnessed in February this year. The regulatory stance of mainland China remains unchanged, despite the subtle promotion of Hong Kong as a global crypto hub.
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