In Hong Kong, applications for spot Bitcoin exchange-traded funds (ETFs) are currently being accepted. Despite mainland China’s ban on crypto, many expect these funds to be approved before the end of June.
The rise of spot Bitcoin ETFs in the US has played a significant role in driving Bitcoin’s recent rally. Now, Hong Kong is positioning itself to join the trend with a potential launch of ETFs this quarter, according to analysts at Bloomberg Intelligence.
If approved, these ETFs would provide retail investors in Hong Kong with exposure to crypto. This would be a major development, considering the country’s previous stance on cryptocurrency speculation.
In December, the Hong Kong Monetary Authority and the Securities and Futures Commission announced they would consider applications for spot crypto ETFs. This decision highlights the country’s increasing interest in virtual assets.
Although the launch of spot ETNs on the London Stock Exchange is also expected in June, these will only be available to institutional investors. As such, the impact may be limited. However, this year is shaping up to be the “Year of the Crypto ETFs,” according to former head of research at Genesis, Noelle Acheson.
Acheson also notes the growing interest in Bitcoin in the Asian market, with monthly volume for spot crypto exchanges in the region exceeding $1.5 trillion. This is eight times higher than the volume seen in the US. However, the high volume does not necessarily translate into fund inflows, and concerns about wash trading in the region remain.
Hong Kong spot Bitcoin ETFs may face unique challenges, including the fact that ETFs are a relatively new market in Asia. Additionally, the Chinese government’s opposition to crypto could hinder the approval process.
Despite these challenges, Acheson sees a positive outlook for global Bitcoin ETFs, especially as the need for a hedge against currency debasement becomes increasingly apparent.
In terms of market movement, Bitcoin and Ethereum both experienced a decline on Monday, with Bitcoin falling 6% to trade at $65,366 and Ethereum falling 5.7% to around $3,307.
In other news, Tyler Pearson, a junior markets correspondent at DL News, is closely following the crypto market. If you have any tips, you can reach him at ty@dlnews.com.
