The recent approval of Bitcoin exchange-traded funds (ETFs) in Hong Kong has been hailed as a major milestone by some experts. However, others caution that broader market forces, such as inflation and geopolitical risk, could overshadow this positive development.
Livio Wang, the chief operating officer of Hong Kong-based HashKey Group, expressed excitement about the launch of Asia’s first Bitcoin spot ETF and the world’s first Ethereum spot ETF. Wang believes that this is a significant step for traditional financial institutions in Hong Kong to enter the market and provide retail users with a more convenient way to purchase cryptocurrencies.
Wang pointed out that Hong Kong spot Bitcoin ETFs have some unique features compared to their US counterparts, such as the ability to subscribe and redeem using both fiat money and cryptocurrencies like Bitcoin and stablecoins. He also highlighted the approval of a spot Ether ETF, which faced more regulatory hurdles in the US.
Patrick Pan, CEO and chairman of OSL Exchange, expects the launch of these ETFs to attract more capital into Hong Kong’s digital asset market. Pan praised the in-kind settlement feature of Hong Kong spot ETFs, as it ensures uninterrupted trading flows and enhanced market liquidity.
Crypto exchange eToro also believes that Hong Kong spot ETFs have promising prospects. In a statement, eToro stated that Hong Kong could become the first Asian jurisdiction with a Bitcoin spot ETF, positioning itself as a rising crypto hub in the region and potentially encouraging other neighboring countries and jurisdictions to follow suit.
However, eToro also emphasized that all attention now turns to Bitcoin’s Halving event. The exchange questioned whether the price would rally to new all-time highs due to the immediate supply shock from the halving or if it would experience a decline, similar to the sell-the-news event following the approval of the Bitcoin spot ETF earlier this year.
Not everyone shares the same enthusiasm for Hong Kong spot Bitcoin ETFs. Bloomberg ETF analyst Eric Balchunas noted that mainland China investors may not be eligible to purchase these ETFs due to restrictions on buying virtual assets. Balchunas predicts that Hong Kong spot Bitcoin ETFs will only attract $1 billion in the next two years, significantly less than the approximately $50 billion managed by US spot Bitcoin ETFs.
Markus Thielen, founder of Singaporean blockchain analytics firm 10x Research, expressed concern about the market and decided to sell all their assets after the approval of Hong Kong spot ETFs. Thielen believes that risk assets, including stocks and cryptocurrencies, are on the verge of a significant price correction.
Bitcoin has experienced a loss of nearly 20% since reaching its all-time high of $73,750 per coin last month. The digital asset’s decline was attributed to escalating tensions in the Middle East on April 13.
Source: Eric Balchunas (X).
Related: ‘China is about to start bidding’ — Will Hong Kong Bitcoin ETFs spark the halving rally?