Can Hong Kong's Bitcoin ETF surpass the United States?

Title: “Will Hong Kong's Bitcoin ETFs Outshine US Peers? Experts Weigh In”

Source: Bitcoinist

Compiled by: Blockchain Knight

Hong Kong is set to take groundbreaking steps in the BTC space.

According to a recent report by Bloomberg, the SFC (Securities and Futures Commission of Hong Kong) is expected to approve a spot BTC ETF for physical creation and redemption in the upcoming second quarter.

This development could significantly alter the landscape of Crypto asset investment and potentially position Hong Kong as a leader in the global BTC ETF market.

Notable figures in the Crypto asset industry, including newsletter author Noelle Acheson, shared insights on the potential impact of this move: "In terms of trading volume, the Asian Crypto asset market is much larger than the US Crypto asset market."

She outlined two possibilities: the existing high trading volume may indicate a saturated market, or it may suggest that the Asian market is more familiar and accustomed to Crypto assets.

Acheson added, "ETFs listed in Hong Kong could channel significant funds into 'approved' portfolio allocations."

This suggests a significant shift in investment flows.

Bloomberg ETF expert Eric Balchunas emphasized the importance of Hong Kong's approval of spot BTC ETFs for physical subscriptions and redemptions, contrasting it sharply with the US, which only allows cash subscriptions.

Balchunas stated, "This will help stimulate the region's rapidly growing asset management scale and trading volume, giving Hong Kong a considerable strategic advantage."

Caitlin Long, founder and CEO of Custodia Bank, also weighed in, highlighting another key aspect of the proposed ETF structure in Hong Kong: the ability to directly withdraw BTC. This ensures that investors hold more than just "paper BTC."

Long expressed excitement about this development: "If the spot BTC ETF is approved in Hong Kong, it would be huge and ironic. American banks will watch themselves being sidelined."

Discussions around the potential of Hong Kong's BTC ETF have expanded from industry experts to the broader Crypto asset community.

Notable analyst Bitcoin Munger believes that the catalytic effect of the Hong Kong ETF far exceeds that of the US ETF.

Munger cited data from Glassnode, indicating that BTC supply is gradually shifting from the West to the East, which he believes strengthens the case for Hong Kong's ETF to surpass that of the US.

Munger added, "BTC has been moving from the West to the East, which strongly supports the idea that Hong Kong's ETF will be a more bullish catalyst than the US ETF."

However, not everyone believes that the Hong Kong ETF will have a significant impact.

Eric Balchunas issued a warning during a heated exchange: "Don't overestimate Hong Kong's market size relative to the US."

"Let's not get too carried away; Hong Kong is too small compared to the US."

Bitcoin Munger countered, "The success of the Hong Kong ETF may not yet be fully recognized, and any positive surprises could catch analysts, including Balchunas, off guard."

When a user raised a question about whether mainland Chinese investors could purchase these ETFs, Balchunas responded negatively: "No."

This dampened the enthusiasm of some, as the important Chinese market could potentially become a strong supporter of BTC through these ETFs against the backdrop of a real estate crisis and a tendency towards gold.