The approval of Bitcoin exchange-traded funds (ETFs) in Hong Kong has been eagerly awaited by industry experts. It is seen as a significant milestone, although some caution that other factors like inflation and geopolitical risk could overshadow the bullish event.
Livio Wang, the COO of HashKey Group, expressed delight at the launch of Asia’s first Bitcoin spot ETF and the world’s first Ethereum spot ETF. Wang believes this will encourage traditional financial institutions in Hong Kong to enter the market and provide a more convenient purchasing gateway for retail users.
However, there are some unique features to the Hong Kong spot Bitcoin ETFs compared to those in the US. Subscriptions and redemptions can be made using fiat money, Bitcoin, and stablecoins. Wang also praised the approval of a spot Ether ETF, which faced greater regulatory hurdles in the US.
Patrick Pan, CEO and chairman of OSL Exchange, expects the ETFs to boost capital inflow into the digital asset market in Hong Kong. He also highlighted the ability of Hong Kong spot ETFs to allow in-kind settlement, resulting in uninterrupted trading flows and enhanced market liquidity.
eToro is optimistic about the prospects of Hong Kong spot ETFs, noting that it positions Hong Kong as a rising crypto hub in Asia and could pave the way for other neighboring countries to follow suit.
However, eToro also acknowledges that all attention is now on Bitcoin’s Halving event. The question is whether the price will rally to new all-time highs or if it will fall lower after the halving, similar to the sell-the-news event following the approval of the Bitcoin spot ETF earlier this year.
There are some who are less enthusiastic about the Hong Kong spot Bitcoin ETFs. Bloomberg ETF analyst Eric Balchunas believes mainland China investors will be barred from buying these ETFs, limiting the demand. Balchunas predicts that Hong Kong spot Bitcoin ETFs will only attract $1 billion within two years, compared to the $50 billion managed by US spot Bitcoin ETFs.
Markus Thielen, founder of 10x Research, sold all their assets after the approval of the Hong Kong spot ETFs. Thielen expresses concern that risk assets like stocks and crypto are on the verge of a significant price correction. Bitcoin has already lost nearly 20% of its value since reaching its all-time high last month, partly due to escalating tensions in the Middle East.