Eric Balchunas and Rebecca Sin, both analysts at Bloomberg, have revised their projections for the assets that could be managed by Bitcoin and Ethereum ETFs based in Hong Kong. The new forecast suggests that the AUM (Assets Under Management) for these funds might not exceed $1 billion.
Hong Kong Bitcoin & Ethereum ETFs Might Face China’s Regulatory Scrutiny
Balchunas shared insights indicating that mainland China investors may not be eligible to purchase these ETFs due to restrictions on virtual asset investments. Consequently, the analysts have revised the AUM target down from $25 billion to $1 billion for the first two years.
Although Balchunas now thinks a $1 billion market size for Hong Kong’s Bitcoin and Ethereum ETFs is acceptable, he points out that it pales in comparison to the earlier forecasted $25 billion. Moreover, achieving this scaled-down goal largely depends on advancements in related infrastructure.
Additionally, Balchunas pointed out that while mainland China investments come with restrictions for investors, there are lesser-used avenues for investing in the region. Yet, it’s important to note that these unconventional paths might attract regulatory attention.
Previously, the analyst pointed out that the inflows into Bitcoin and Ethereum ETFs based in Hong Kong would be less than anticipated. The primary reason was the smaller size of Hong Kong’s crypto market compared to the United States. Furthermore, regulations limiting Chinese investors’ access added complexity to the situation.
Hong Kong SFC Offers Greenlight
Previously, on April 14, 2023, the Hong Kong Securities and Futures Commission (SFC) authorized the sale of Spot Bitcoin and Ethereum Exchange-Traded Funds (ETFs), signifying a major achievement. Notably, Hong Kong is the first place to offer Spot Ethereum ETFs, while the US Securities and Exchange Commission (SEC) is currently considering similar initiatives.
Various financial organizations including China Asset Management, Bosera Capital, and HashKey Capital Limited have been given approval by the Securities and Futures Commission of Hong Kong to introduce Bitcoin and Ethereum Exchange-Traded Funds (ETFs). This development enables investors to acquire shares in these ETFs, thereby granting them access to invest in Bitcoin and Ethereum.
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2024-04-17 18:15