Hong Kong’s financial 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. Bloomberg ETF analyst Rebecca Sin, in a research note shared by Eric Balchunas on March 26, highlights the contrast between Hong Kong’s approach and that of the U.S. Securities and Exchange Commission (SEC), which only permits cash creation models for spot Bitcoin ETFs.
Bitcoin ETFs have seen a total of $11.28 billion in flows since their launch. However, they experienced a net negative of $1.07 billion in net flows last week before starting to recover on Monday. Following five consecutive days of negative outflows, U.S. spot Bitcoin ETFs saw inflows of over $15 million on March 25, coinciding with Bitcoin’s highest daily close above $69,000 in the past 10 days. The influx of funds into the ETFs helped push Bitcoin’s price back above $70,000 on the same day. Additionally, investors have been accumulating BTC off exchanges, resulting in a nine-year low of 344,856 BTC on Coinbase as of March 18.
Bitfinex analysts reassured Bitcoin holders and price action enthusiasts that last week’s negative spot Bitcoin ETF inflows are not a cause for long-term concern. Meanwhile, a fifth-richest Bitcoin whale moved over $6 billion worth of BTC.