Exchange-Traded Funds (ETFs) for Bitcoin and Ethereum were recently accepted by Hong Kong. During this time, China has been very against cryptocurrencies.
This is likely to change how people trade digital assets. People from China might not be able to use this chance, though, because of strict rules in their own country.
In 2021, China made it illegal to buy, sell, or mine cryptocurrency. China has had a hard time getting into global crypto markets ever since. Hong Kong’s growing crypto ETF market is still closed to buyers from the mainland because the country is still being careful.
But Hong Kong has changed to be a better place for bitcoin companies to run. In a significant manner, the city’s acceptance of Bitcoin and Ethereum ETFs is a step forward. This means that these money-making chances can be made by well-known companies such as ChinaAMC, Harvest Global, and Bosera International.
Bitcoin ETF Approval In Hong Kong Pending
Though the Hong Kong Securities and Futures Commission (SFC) has not yet made the approval public, the issuers have said that it has. Lot of people believe that these ETFs might help Bitcoin prices rise, but the fact that they can’t be bought from the mainland might make these dreams less strong.
Eric Balchunas, a senior ETF expert at Bloomberg, is still not sure that Hong Kong’s ETFs will have an immense impact, because the markets in the US and Hong Kong are not the same size. People in Hong Kong think it’s a good thing that these ETFs are now available, but Balchunas says that they might not have as much of an impact as their US peers.
Balchunas points out a few things that might make it hard for Hong Kong’s ETFs to do well. For example, the $50 billion local ETF market isn’t very significant, and producers don’t have much experience. He also says that worries about liquidity and higher fees may keep a lot of money from flowing into these ETFs.
Major investors may find comfort in Hong Kong’s ETFs’ longer trade hours, even with these issues. This could make global trading tactics better. But SEC reports show that institutions still only have small amounts of Bitcoin ETFs. Because of this, it’s hard to think that this advantage will change the market right away.
The fact that this development has occurred in Asia for the first time, underscores the global nature of this evolving narrative. The trajectory of the crypto industry is moving in a direction that fosters adoption, albeit gradually, signaling promising prospects for its future growth and mainstream acceptance,
Sumit Gupta, co-founder of crypto exchange CoinDCX.
Cryptocurrencies are still illegal in China, but people can trade them in Hong Kong. Both China and Hong Kong have different rules about cryptocurrencies, which shows how difficult the forces are that will shape the future of these markets.
