PANews reported on May 7 that QCP Capital, a Singapore-based crypto investment institution, said that the fluctuations in the Taiwan dollar quickly affected the regional foreign exchange market, and the Hong Kong dollar/US dollar currency pair was significantly impacted. The Hong Kong dollar exchange rate climbed to the strong end of the trading range, close to the lower limit of 7.75 pegged to the US dollar. The Hong Kong Monetary Authority took decisive action and sold a total of HK$73.3 billion in two operations to defend the linked exchange rate system, with significant results. The Hong Kong interbank offered rate fell across the board, and hedge funds closed their positions in the US dollar/Hong Kong dollar carry trade. The one-month interest rate plummeted by nearly 60 basis points in a single day. The market is currently stable, but if the Hong Kong dollar continues to strengthen, the HIBOR rate may fall again, and the liquidation situation may become more disorderly.

The unwinding of positions in the foreign exchange market also fueled speculation about easing trade tensions between the United States, and Bitcoin quickly responded, rising 3% to $97,000, erasing weekend losses. But the rise was not driven solely by the foreign exchange market. Another catalyst came from New Hampshire, where the governor approved a landmark measure to establish the first state-level Bitcoin reserve in the United States. The legislation allows up to 5% of public funds to be allocated to cryptocurrencies and precious metals. For now, Bitcoin is the only digital asset that qualifies, as the market capitalization threshold is set at $500 billion. Although this is only a small policy adjustment at the state level, it is a big step forward for the institutional future of cryptocurrency.