Conflux Network (CFX), an Asia-focused blockchain often referred to as the “Chinese Ethereum,” recently experienced a spike in token prices following the decision by Hong Kong to allow retail investors to trade cryptocurrencies. Proponents of Conflux argue that this move could lead to an influx of capital from Chinese investors. After the announcement, the price of CFX rose to 33 cents, up from the weekend’s 29 cents mark, only to drop back down to 30 cents by Wednesday morning as early buyers likely took profits.
Conflux, a fast, and affordable blockchain, claims to be the only regulatory-compliant public blockchain in China. It has partnered on blockchain and metaverse initiatives with major local and global brands, as well as government entities, such as the city of Shanghai, McDonald’s China, and Oreos. They have previously announced plans to build blockchain-based SIM cards in collaboration with China Telecom, a major wireless carrier boasting an impressive 390 million subscribers.
Despite the increase in price and a string of announcements related to industry collaborations, on-chain data reveals that transaction counts have still not surpassed previous highs set in the fall. This suggests that the protocol has not yet managed to build a substantial user base. Conflux Network CTO Ming Wu stated back in March that the company aimed to “take the leading role to help Hong Kong and mainland China carry out their expansions in the Web3 area.”
The first BSIM pilot program in Hong Kong is set to launch later this year, with plans for additional pilots in mainland China, including key locations like Shanghai. This context has led to prominent Crypto Twitter community members assigning Conflux the moniker of “Chinese Ethereum,” resulting in a notable increase in valuation over the past few months. Conflux’s market capitalization has soared from $46 million at the beginning of the year to almost $650 million, making CFX one of the best-performing tokens.
Some Asia-focused investors are speculating that the indirect connections Conflux has to the Chinese market may position its CFX token as a proxy bet on the broader Asian market. Jeff Mei, COO of Taiwan-based crypto exchange BTSE, shared with CoinDesk via Telegram that Conflux Network’s alliance with China Telecom, a state-backed telecom provider, is a “clear bullish signal on the network retaining highly productive ties with influential organizations.”
Jeff Mei also mentioned the recent regulatory changes in Hong Kong, which will permit retail crypto trading under regulatory supervision. Although currently limited to BTC and ETH, Mei believes that this series of bullish news for the Greater China region works in Conflux’s favor.
Source: Coindesk
