Hong Kong’s regulators are looking to introduce in-kind creation models for spot Bitcoin exchange-traded funds (ETFs), presenting a significant market opportunity that could boost assets under management (AUM) and trading volume for Bitcoin ETF issuers in the region. This information comes from a research note by Bloomberg ETF analyst Rebecca Sin, which was shared by Eric Balchunas on March 26. Unlike the US Securities and Exchange Commission (SEC), which only allows cash creation models for spot Bitcoin ETFs, Hong Kong is taking a different approach.
Bitcoin ETFs have accumulated a total of $11.28 billion in flows since their launch, with a net negative of $1.07 billion in net flows last week. However, the trend started to reverse on Monday, with United States spot Bitcoin ETFs seeing over $15 million in flows on March 25. This was the same day that Bitcoin’s price reached its highest daily close in the past 10 days, surpassing $69,000. The ETF inflows have played a role in boosting Bitcoin’s price, as it reclaimed the $70,000 mark on March 25. Additionally, investors have been accumulating BTC off exchanges, leading to a nine-year low in BTC supply on Coinbase on March 18, with only 344,856 BTC available.
Despite the negative outflows from spot Bitcoin ETFs last week, Bitfinex analysts reassured Bitcoin holders and price action that this is not a long-term concern. In other news, a fifth-richest Bitcoin whale recently moved over $6 billion worth of BTC.