Opinion by: Joshua Chu, co-chair of the Hong Kong Web3 Affiliation
China’s management over cryptocurrency liquidity in Hong Kong provides it unprecedented energy over the Trump household’s crypto wealth. This leverage lets Beijing affect the household’s monetary destiny — and doubtlessly US-China relations — by means of market strikes. As Eric Trump visits Hong Kong, this crypto-political nexus alerts a brand new period of worldwide energy.
Cryptocurrency is not seen as simply the brand new monetary innovation across the block. Digital belongings have grow to be highly effective geopolitical devices figuring out the fates of countries.
As Imran Khalid stated, “China, in contrast [to the US], has performed the lengthy recreation. It selected dialogue over drama, and precept over provocation.”
China’s rise and rising management and dominance over the Web3 economic system have been equally marked by its fastidiously orchestrated versatile liquidity management construction by means of a parallel hedge in Hong Kong. When contemplating this stage of management, mixed with the Trump household’s unprecedented and growing reliance on digital belongings for wealth, it reveals a refined but decisive type of affect that Beijing can wield.
Trump household’s crypto wealth surge
US President Donald Trump attacked Bitcoin (BTC) throughout his first presidency, saying it’s “not cash” and “based mostly on skinny air.” This place had made an apparent U-turn by 2025.
In a Fox Information interview with Donald Trump Jr., he revealed that the household “didn’t have a alternative” however to get into crypto after banks refused to do enterprise with them after the Jan. 6 “nonsense.” As a politically uncovered individual (PEP), this was a telling turnaround.
Banks and monetary establishments are normally stricter when coping with PEPs as a result of their distinguished positions normally imply they grow to be targets for bribery and corruption, yielding a better danger of economic crime entanglement with illicit cash laundering.
Since taking the plunge into crypto, the Trump household has shifted dramatically in favor of crypto as a single engine of private wealth. In July, it was reported that the Trump household’s crypto ventures dominate their portfolio, accounting for 40% of their $2.9 billion web price.
These ventures embody World Liberty Monetary, which has efficiently raised a whole bunch of tens of millions of {dollars} by means of token gross sales, together with the TRUMP and MELANIA memecoins. Eric Trump’s involvement in American Bitcoin has additional amplified the household’s crypto publicity.
This crypto publicity is unprecedented for political households within the US, if not your complete world. It has additional concentrated wealth in an asset class recognized for its hyper-volatility, which, in flip, is now an trade that’s intertwined with Hong Kong’s licensed exchanges — exchanges which are on the epicenter of China’s crypto liquidity technique.
Whereas this setting introduces heightened monetary danger, it concurrently empowers China with a important lever.
China’s crypto liquidity technique
China’s announcement to liquidate seized digital belongings by way of Hong Kong’s licensed exchanges is not only regulation enforcement housekeeping however a core strategic transfer in Beijing’s international crypto ambitions. This liquidity injection plan, coupled with the LEAP Digital Belongings Coverage 2.0, goals to show Hong Kong into the dominant digital asset hub that China can make the most of as a market worth automobile.
Associated: China’s crypto liquidation plans reveal its grand technique
The “nationwide workforce” is a time period that’s well-known in Hong Kong’s (and larger Asia’s) monetary circles. It contains sovereign wealth funds and different state-backed entities, with belongings reportedly properly over $1 trillion. Initially shaped in response to the market crash in 2015, the nationwide workforce poured $17 billion into the markets and was credited for reducing the dangers by 30%-45% in the course of the intervention.
Quick ahead to 2025, the nationwide workforce is proof that China’s plan to liquidate seized crypto isn’t merely an “offloading” motion. As an alternative, entities just like the nationwide workforce can equally purchase up any liquidating crypto, management market provide and demand to stabilize, inflate or deflate asset values as Beijing wishes.
China’s grand technique is dynamic and versatile. It’s a pointy distinction with the US, which has maintained a passive hodl-only reserve coverage, missing the pliability to affect liquidity or reply successfully to cost volatility.
To this finish, China stays one of many few international locations with the distinctive mixture of a large liquidatable pool of digital belongings and a nationwide workforce working outdoors the confines of mainland China, together with the sovereign wealth fund in Hong Kong with over $1 trillion on standby.
This twin functionality provides China a exceptional means to regulate valuations, able to pushing costs to rise, fall or stabilize at Beijing’s discretion. Contemplating the growing variety of firms and international locations following the Bitcoin treasury technique, Beijing could have unprecedented affect over such firms and nations.
By way of Hong Kong, China has created a key to cementing the Trump household’s legacy, both to catapult his household wealth to the moon or flip him into the beggar king if he misbehaves.
US coverage softens towards China whereas pressuring others
China’s simultaneous management over a number of levels of the digital asset market worth chain permits Beijing to effectively handle the provision and demand (which crypto depends closely on for its valuation) and pricing dynamics abruptly, successfully commanding the crypto market (very similar to its most well-liked type) reasonably than being a mere participant in it.
For instance, the Trump administration’s powerful stance towards India for importing Russian oil is contrasted by its leniency towards China, which, as famous by many reporters, is a far bigger importer of Russian vitality.
The selective stress reveals China’s larger geopolitical leverage, which, on the floor, seems to be all about uncommon earths however, deeper down, might embody monetary sway over politically related actors such because the Trump household.
Eric Trump’s upcoming homage to Hong Kong’s forthcoming crypto convention symbolizes this crypto nexus. His participation underscores how tightly the First Household’s monetary and political fortunes are sewn into the material of China’s strategic crypto market.
Opinion by: Joshua Chu, co-chair of the Hong Kong Web3 Affiliation.
This text is for basic data functions and isn’t supposed to be and shouldn’t be taken as authorized or funding recommendation. The views, ideas, and opinions expressed listed here are the creator’s alone and don’t essentially replicate or characterize the views and opinions of Cointelegraph.
