Bitcoin gains after China signals crypto trading plan for Hong Kong

Bitcoin (BTC-USD) is up over 2%, as investors watch the US debt ceiling impasse and expect a positive cryptocurrency movement in China.

Bitcoin traded at around $27500 (PS22175) on Monday, up 0.8% for the week.

The market capitalization of the global cryptocurrency industry is now $1.19tn (up 1.8%).

Investors monitor developments in Hong Kong, China and are anticipating a plan that would allow retail investors in Hong Kong to trade cryptocurrency through Hong Kong.

At a briefing on Tuesday, the Hong Kong Securities and Futures Commission will reveal its consultation conclusions regarding retail participation. The commission also plans to introduce a licensing system for digital asset platforms by 1 June.

The move has not been without controversy given the turmoil of the crypto market in 2022, and the crash of the FTX Exchange.

Bitcoin fluctuated between $26,500 to $27,500 over the last fortnight amid US debt ceiling discussions between President Joe Biden, and House leaders.

The US Treasury Department confirmed on Monday that the government could only fulfill its financial obligations until 1 June, without raising the debt limit. This leaves a 10-day window to reach an agreement between White House and Republican congressional negotiators.

Analysts believe that the risk of an US default is low, but if one does happen it could cause cryptocurrency prices to fall.

Michael Saylor (co-founder of MicroStrategy MSTR), who believes that bitcoin has entered a new bullish market, gave bitcoin a boost in confidence.

He attributes the upswing in bitcoin to the halving of bitcoin, the increased adoption and the expected regulatory crackdown against the wider crypto industry.

In an interview with CNBC, he predicted that investor and developer attention would shift from other blockchains towards bitcoin as regulations eliminate other competing cryptocurrencies.