As the 2024 U.S. election approaches, the global crypto market&#39;s sensitivity to political trends has reached an unprecedented level. Last month, with Trump leading in support across various betting sites and prediction markets, expectations of his potential presidential win surged, prompting a strong rally in Bitcoin, with its price temporarily exceeding $70,000, close to this year’s historical high. This price movement demonstrates the market&#39;s heightened sensitivity to policy changes, further drawing attention to the potential impact of the U.S. election on the crypto market and Hong Kong&#39;s strategic significance in this era.Impact of the U.S. Election on the Crypto MarketThe U.S. election and the crypto market have experienced some dramatic developments this year. At this year’s Bitcoin conference, Trump openly expressed his desire to make the U.S. the &#34;the crypto capital of the planet and the Bitcoin superpower of the world&#34;. Historically, Trump was not a supporter of Bitcoin and even criticized it publicly. This reversal in stance has continued, and if Trump is elected, his pledges to incorporate Bitcoin into national reserves and replace current SEC Chair Gary Gensler may gradually be implemented after his inauguration.In the long run, Trump&#39;s support could influence more traditional, older financial decision-makers. Many of them had conservative or skeptical views on Bitcoin, but Trump’s endorsement might lead them to reevaluate the potential of crypto assets, thereby further integrating cryptocurrency into mainstream finance.On the other hand, Harris has also expressed a favorable stance towards the crypto industry, mentioning the need to &#34;encourage innovative technologies like AI and digital assets while protecting our consumers and investors&#34;. Though not as explicit as Trump, it signals the Democratic Party’s supportive stance towards crypto.Realistically, both Trump and Harris support the crypto industry primarily because the U.S. has over 30 million crypto users, a formidable group that cannot be ignored by any presidential candidate. Regardless of whether the Republicans or Democrats take office, both parties are eager to claim historical credit for leading the Web3 technology revolution.In 2022, U.S. Congress members explicitly outlined the need to ensure the Web3 revolution occurs in America. It is almost a consensus among U.S. elites that cryptocurrency will be a national strategy. Although Bitcoin ETFs had not been approved for years, both Bitcoin and Ethereum ETFs were approved late last year and this year. The underlying reason is that the U.S. has keenly recognized the importance of leading Web3 development.After all, any government capable of leading a groundbreaking technological revolution should not pass up the opportunity. This is also one of the reasons why Hong Kong has been actively supporting Web3 development.While both the Republican and Democratic parties support the crypto industry, their actual governance approaches might differ. If Trump wins, U.S. regulatory bodies may loosen control over the crypto industry, provide more policy support, and possibly stimulate virtual asset market activity through expanded budgets. Conversely, if Harris wins, she may adopt a more balanced approach, encouraging innovation while focusing on investor protection. Although Harris&#39;s policies may appear somewhat conservative, this prudent approach would not hinder crypto market growth; rather, it could provide a stable environment for development.In terms of market sentiment, Trump’s election would likely bring a short-term boost to the crypto market, while a Harris victory might cause increased short-term price volatility. Personally, if Trump is elected, his proactive fiscal policies might affect inflation data, which could, in turn, impact the Federal Reserve&#39;s rate-cutting timeline—something worth watching beyond market sentiment. Conversely, if Harris wins, creating a stable market environment might moderate inflation and facilitate smoother rate-cutting policies.These market responses reflect how policies of different political leaders impact investor psychology. In practice, however, the growth of the crypto industry should focus more on long-term infrastructure and a refined regulatory environment.Global Competition for Web3 DominanceIt’s not just the U.S.; major economies and emerging markets worldwide are accelerating their Web3 initiatives to gain a foothold in this revolution.Recently, the European Union implemented the &#34;Markets in Crypto-Assets Regulation&#34; (MiCA), establishing a more systematic framework. Major exchanges have responded actively, with non-compliant stablecoins, such as the most widely held USDT, gradually being delisted from the EU.Besides the EU, Japan’s Financial Services Agency has also eased crypto regulations, encouraging domestic financial institutions to explore blockchain and Web3 technologies. The Monetary Authority of Singapore has promoted tax incentives, innovation labs, and funding to build a favorable business environment, positioning Singapore as an Asian hub for Web3 and fintech. Dubai is also building its competitive edge in the Web3 field.Countries like Bermuda and Nigeria are also striving to create crypto-friendly policies to attract Web3 companies. For example, Coinbase obtained its fourth license in Bermuda, and HashKey received its fifth license there, reflecting Bermuda&#39;s rapid development as an emerging market in Web3.Historically, global crypto market rules were shaped mainly by a few major economies, which led to “regulatory arbitrage”.Now, with more countries implementing comprehensive regulations, this phenomenon is fading. In the future, licensed operations, regulatory compliance, and customer asset protection will become mainstream in the crypto industry. HashKey is actively pursuing global licenses and aims to surpass Coinbase in the licensed exchange sector within five years, establishing the largest cluster of licensed exchanges globally.In summary, Web3 is not just a tech-driven financial revolution but a disruptive global paradigm shift. Web3 development has become a global consensus, with nations participating in this emerging field through policies and regulatory measures to foster innovation and drive economic growth.Leveraging its geographical location, economic environment, and policy support, Hong Kong is playing a critical role in this competition. As an Asian financial centre and a bridge between East and West, Hong Kong&#39;s development in the Web3 space not only impacts regional economic transformation but also plays an essential role in driving the construction of the global Web3 ecosystem.Hong Kong’s Strategic Position as a Web3 GatewayCurrently, Hong Kong’s momentum in embracing Web3 is only increasing. In the 2024 Policy Address, Chief Executive John Lee mentioned accelerating the development of digital trade, creating a fintech innovation ecosystem, and advancing the digital economy. Compared to the 2023 Policy Address, which only mentioned “promoting the digital economy,” this year’s address is more detailed, for the first time mentioning support for central bank digital currency (CBDC), mobile payments, virtual banks, virtual insurance, and virtual asset trading. The Hong Kong government’s explicit stance reflects forward-thinking in fintech and firm support for innovative financial services. As an industry player, HashKey is now more confident in Hong Kong&#39;s Web3 industry future due to the government&#39;s ongoing support.Regarding stablecoin regulations, three issuers have now entered Hong Kong&#39;s stablecoin regulatory sandbox, with positive news expected by year-end or in Q1 next year. Hong Kong’s regulatory framework aligns closely with Europe’s MiCA regulations. Previously, without endorsement from major financial institutions, stablecoins struggled to gain real “stability” for users. As the era of compliant crypto trading arrives, governments in Hong Kong, Europe, Singapore, the U.S., and others are working on launching domestic stablecoins, which could reshape the global stablecoin market.Hong Kong’s Web3 development relies on its advanced financial infrastructure and robust legal system, as well as comprehensive ecosystem support. By integrating fintech and Web3 enterprise resources, Hong Kong provides rich resources for startups and tech teams while creating a platform for cross-sector collaboration, fostering a diverse and sustainable Web3 ecosystem.Hong Kong’s strategy is not short-term but aims to support long-term Web3 innovation and attract global talent. As a bridge between East and West, Hong Kong occupies a unique position, leveraging technological support from mainland China while attracting international capital and expertise. This makes Hong Kong not only a gateway between China and global markets but also a critical link and leader in future technological cooperation and innovation.This mechanism of dual circulation enables Hong Kong to serve not only the local market but also play a strategic role as a gateway in the global Web3 ecosystem. In connecting East Asian markets with international businesses, Hong Kong provides a compliant and secure channel, becoming an irreplaceable hub in the Web3 ecosystem.ConclusionWhether Trump or Harris is elected as U.S. President, the U.S. will undoubtedly continue to support Web3 technology development. Globally, several countries and regions—including the EU, the U.K., Japan, Singapore, and Dubai—are actively building their Web3 presence to gain a competitive advantage.With its unique geographical position and policy advantages, Hong Kong is positioning itself as a hub for global Web3 development. Hong Kong’s strategic position in Web3 not only lies in its traditional role as a financial center but also as a gateway connecting China with global markets. As global emphasis on Web3 grows, Hong Kong is poised to become a key force driving the construction of a global Web3 ecosystem.

U.S. Election and Global Crypto Market Outlook: Who Will Lead a Groundbreaking Technological Revolution?

Terry Junior

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