Despite China’s firm ban on cryptocurrency trading, Hong Kong, closely tied to the mainland, could inadvertently play a pivotal role in Bitcoin‘s BTC/USD ascent to a much-awaited $100,000 price tag. The financial hub is on the brink of becoming a significant player in the crypto ETF market.
What Happened: As per Reuters, insider sources suggest that spot Bitcoin exchange-traded funds might debut in Hong Kong this month, with initial approvals potentially announced next week. This rapid timeline, faster than industry projections, owes to regulators expediting the approval process.
Chinese Fund Managers See Opportunity: Notably, Chinese asset managers are leading the charge in launching these Bitcoin ETFs. At least four mainland Chinese and Hong Kong asset managers, including China Asset Management, Harvest Fund Management, and Bosera Asset Management, have submitted applications, per Reuters and Nikkei reports.
Why It Matters: The introduction of spot Bitcoin ETFs in Hong Kong is expected to draw substantial global investment, echoing the U.S. success story, where Bitcoin ETFs amassed a staggering $58 billion in assets since January, per Bloomberg.
This surge in demand has propelled Bitcoin’s price by over 60% this year, hitting an all-time high of $73,803 in March.
See Also: How to Buy Bitcoin (BTC)
Bloomberg Intelligence analyst Rebecca Sin sees continued momentum: “The launch of spot-Bitcoin funds in Hong Kong could be imminent…global Bitcoin ETF assets could soon hit $100 billion.”
Senior Bloomberg ETF analyst Eric Balchunas believes Chinese investors would be “going gaga” if regulators allowed them to buy Bitcoin ETFs, “given how much FOMO they have been showing for gold and US stocks.”
Last month, a U.S. CEO who attended a high-level meeting with Chinese President Xi Jinping, said Chinese citizens are reportedly viewing it as risky to be affluent in China and are trying to "get their money out of the country."
While mainland China prohibits crypto trading, its financial institutions are eager to tap into the thriving crypto market via Hong Kong’s more lenient regulations. Hong Kong already allows futures-based crypto ETFs, listing three with combined assets of about $170 million, according to Bloomberg.
Hong Kong’s Ambitions: Hong Kong’s drive for crypto ETFs stems from its aim to reclaim its financial center status amid economic slowdown and geopolitical tensions. By embracing crypto, the city hopes to establish itself as a regional virtual asset hub, Nikkei reports.
Louie Lee of Prosynergy Consulting was quoted as saying, “Hong Kong’s push to encourage crypto asset trading is a step in the right direction for Web3. But we need more development in terms of products.”
Price Action: Bitcoin was trading up 0.17% at $70,877 as of 2:30 am ET, according to data from Benzinga Pro. A bullish analyst predicts a potential new all-time high for BTC ahead of its next halving event, cautioning that altcoins may face challenges.
What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
Read Next: Peter Schiff Predicts Bitcoin ETFs Will Lead To Its ‘Biggest Crash Ever’
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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