The realm of cryptocurrency saw a welcome uplift on Tuesday as Hong Kong's Securities and Futures Commission (SFC) cleared the way for certain digital assets to be traded by retail investors from June 1. This decision has led to a ripple effect across the crypto market, boosting Bitcoin by 1.7% to a value of $27,293.64, as reported by Coin Metrics, while Ether also saw an almost 2% rise to $1,851.91.

The SFC's announcement late Monday represents the conclusion of a public consultation process it initiated in February about proposed regulation of retail crypto trading. The progressive move by Hong Kong aligns with its wider ambition of becoming a global hub for crypto, a vision that is distinctly divergent from both China's, which prohibited crypto trading in 2021, and the U.S. whose regulatory approach toward crypto has been progressively stringent since the downfall of FTX.

Noelle Acheson, a well-known economist and the author of the "Crypto is Macro Now" newsletter, points out that the development does not necessarily imply a deluge of retail investment in the crypto market from the start of June. However, she predicts a noticeable increase in trading volume for the month.

Hong Kong's SFC has already granted licenses to two digital asset platforms, OSL and Hash Blockchain, suggesting that some activity may already be taking place offshore, according to Acheson.

Owen Lau, an analyst at Oppenheimer, lauded Hong Kong's proactive stance towards becoming a significant player in the crypto industry. He emphasized that this move would likely attract more firms to establish their offices in Hong Kong. While it's challenging to quantify the precise impact, Lau posits that this development will inevitably influence long-term capital flow and talent migration in the sector.

Despite recent volatility, cryptocurrency assets like Bitcoin and Ether have been fairly stable throughout May, with both largely adhering to a risk asset-like behavior amid lack of major market triggers and the market's watchful eye on debt ceiling negotiations. However, the decision by Hong Kong's regulator could represent a fresh catalyst for activity in the crypto market.