The recent approval of spot Bitcoin (BTC) exchange-traded funds (ETFs) in Hong Kong has been seen as a major milestone by some experts. However, others caution that larger market forces, such as persistent inflation and geopolitical risk, could overshadow this bullish event.
Livio Wang, the chief operating officer of Hong Kong-based HashKey Group, expressed excitement about the launch of Asia’s first Bitcoin spot ETF and the world’s first Ethereum spot ETF. Wang believes this will allow traditional financial institutions in Hong Kong to enter the market and provide retail users with a more convenient way to purchase cryptocurrencies.
Wang pointed out that Hong Kong spot Bitcoin ETFs have unique features compared to their U.S. counterparts, such as the ability to subscribe and redeem using fiat money, Bitcoin, and stablecoins. He also praised the approval of a spot Ether (ETH) ETF in Hong Kong, as the U.S. has faced greater regulatory hurdles for such products.
Patrick Pan, the CEO and chairman of OSL Exchange, believes that the introduction of these ETFs will significantly increase capital inflow into the digital asset market in Hong Kong. He also highlighted the in-kind settlement feature of Hong Kong spot ETFs, which will ensure uninterrupted trading flows and enhanced market liquidity.
eToro, a prominent crypto exchange, is also optimistic about the prospects of Hong Kong spot ETFs. The exchange sees Hong Kong as a rising crypto hub in Asia and believes this development could pave the way for other neighboring countries and jurisdictions to follow suit with their own ETFs. However, eToro acknowledges that all eyes are now on Bitcoin’s Halving event, wondering if it will lead to a price rally or a sell-the-news event.
Not everyone shares the same enthusiasm for the Hong Kong spot Bitcoin ETF. Bloomberg ETF analyst Eric Balchunas predicts that mainland China investors will not be able to buy these ETFs due to restrictions on buying virtual assets. As a result, Balchunas expects Hong Kong spot Bitcoin ETFs to attract only $1 billion in two years, significantly less than the $50 billion currently managed by U.S. spot Bitcoin ETFs.
Markus Thielen, the founder of Singaporean blockchain analytics firm 10x Research, expressed concerns about the market and sold all their holdings after the approval of Hong Kong spot ETFs. Thielen believes that risk assets, including stocks and cryptocurrencies, are on the verge of a significant price correction.
Bitcoin has experienced a nearly 20% decline since reaching its all-time high of $73,750 last month, with the drop attributed to escalating tensions in the Middle East.