There’s been a lot of buzz in the financial world following Hong Kong’s approval of Bitcoin and Ethereum ETFs. Yet, concerns have arisen about whether Mainland Chinese investors are allowed to invest in these funds.
Eric Balchunas, a well-known expert in Exchange-Traded Funds (ETFs), has highlighted potential obstacles for investors based in Mainland China. Although the ETF setup enables investors to bypass buying digital assets directly, Balchunas cautions that regulatory barriers could still hinder their involvement due to Chinese authorities’ restrictions on virtual assets.
Rebecca Sin, a Bloomberg ETF Analyst, looks on the bright side and predicts that the Hong Kong ETF market will experience significant expansion. Specifically, she believes that the assets in these markets could surpass $1 billion within the initial two years. Yet, her forecast falls below more ambitious predictions made earlier.
Investors based in Mainland China are unlikely to be permitted to purchase Hong Kong-traded spot Bitcoin and Ethereum ETFs due to restrictions prohibiting them from owning virtual assets. Although there are alternative methods available, they are infrequently used and could be subject to closure, according to a note by @RebeccaSin_SK.
— Eric Balchunas (@EricBalchunas) April 17, 2024
The fate of Bitcoin and Ethereum ETFs in Hong Kong depends on various aspects, particularly advancements in infrastructure and clear-cut regulations. According to Balchunas, these factors are essential in drawing investments and establishing Hong Kong as a leading ETF hub in Asia.
Although the ETF has complex features, Balchunas is still wary of China’s viewpoint regarding approval due to past regulatory actions against cryptocurrencies. The Chinese government has a history of restricting Bitcoin trading and mining, leading to doubt about ETF acceptance and investment from Mainland China.
With ongoing events, the spotlight continues on Hong Kong’s ETF (Exchange-Traded Fund) scene. Here, regulatory hurdles meet market opportunities.
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2024-04-17 19:11