For some industry insiders, the much-awaited approval of spot Bitcoin exchange-traded funds (ETFs) in Hong Kong earlier this week marks a major turning point. Some caution that the optimistic event may be overshadowed by stronger market dynamics, such as ongoing inflation and geopolitical risk.
The first Ethereum spot ETF in the world and the first Bitcoin spot ETF in Asia have just been launched, and Livio Wang, the chief operating officer of HashKey Group, based in Hong Kong, stated in a statement, "We are delighted to witness the historic moment." "This will mark a noteworthy achievement for established financial institutions in Hong Kong to join the market and offer a more convenient gateway for purchases to retail customers."
Wang added that Hong Kong spot Bitcoin ETFs offer a number of special characteristics not seen in U.S. spot Bitcoin ETFs, which were approved in January. These features include the ability to subscribe and redeem using both fiat currency and Bitcoin and stablecoins. Wang also praised Hong Kong authorities for clearing a spot Ethereum transaction, which has faced more regulatory obstacles in the US.
The launch of these ETFs is anticipated to significantly increase capital inflow into the Hong Kong digital asset market, according to Patrick Pan, CEO and chairman of OSL Exchange. Pan also commended the Hong Kong spot ETFs' capacity to support in-kind settlement, stating that this kind of structure will lead to "uninterrupted trading flows" and "enhanced market liquidity."
The cryptocurrency exchange eToro is optimistic about Hong Kong spot ETFs as well. "Hong Kong would become the first Asian jurisdiction to have a bitcoin spot ETF, positioning itself as a rising crypto hub in Asia, as well as potentially paving the way for other neighboring countries and jurisdictions to follow suit with their own ETFs," the exchange said in a statement.
"More potential investors and integrations into the traditional financial system could bode well for the bitcoin price."
All eyes are now focused on Bitcoin's halving event, eToro added in response to the news of the Hong Kong ETF. "Every investor in Bitcoin is now wondering if the market will rise to new highs due to the supply shock from the halving, or if it will fall even further and the halving turns into a sell-the-news story after all the hype, like the approval of the Bitcoin spot ETF earlier this year," the exchange said.
Some people are less optimistic about the future of the Hong Kong spot Bitcoin exchange fund.
Since they are prohibited from purchasing virtual assets, investors from mainland China are unlikely to be able to purchase Hong Kong-listed spot bitcoin and ether ETFs, according to Bloomberg ETF analyst Eric Balchunas. Owing to these restrictions on demand, Balchunas projects that Hong Kong spot Bitcoin exchange-traded funds (ETFs) will only draw "$1 billion within two years," a significant amount less than the roughly $50 billion that U.S. spot Bitcoin ETFs presently handle.
In the meantime, just one day after Hong Kong spot ETFs were permitted, Markus Thielen, founder of the Singaporean blockchain analytics company 10x Research, stated that the company "sold everything last night." "We are increasingly concerned that risk assets, such as stocks and cryptocurrency, are on the verge of a substantial price correction," Thielen stated.
Since hitting an all-time high of $73,750 per coin last month, the value of bitcoin has decreased by about 20%. The digital asset saw a sharp decline on April 13 as a result of growing tensions in the Middle East.
April 2024, Cryptoniteuae