Starting on April 30th, Hong Kong will initiate the trading of multiple spot Bitcoin Exchange-Traded Funds (ETFs), marking a major milestone for the Bitcoin market.
After the SEC’s approval and subsequent trading of Bitcoin ETFs in the US this year, we have reached another significant achievement.
As more institutions embrace Bitcoin and its price hit an all-time high of $73,700 in March, the upcoming introduction of Bitcoin ETFs in Hong Kong is anticipated to significantly boost the cryptocurrency market.
Fee Battle Looms
On April 15th, the Hong Kong Securities and Futures Commission (SFC) gave its approval for several Spot Bitcoin and Ethereum Exchange-Traded Funds (ETFs) to begin trading. This significant regulatory decision marks the commencement of Bitcoin ETF trading in Hong Kong.
According to industry insiders Eric Balchunas and James Seyffart from Bloomberg, there is likely to be a fierce competition among ETF issuers to win over the greatest number of investors, which could lead to a reduction in fees.
According to Balchunas and Seyffart’s forecast, a fee battle may ensue in Hong Kong as Bitcoin ETFs are set to debut. For example, Harvest Fund intends to join the market with a zero-fee introduction and a minimum fee of 0.3% after the introductory period has ended.
According to the graph, three prominent market participants – ChinaAMC, Harvest Fund, and Bosera – are highlighted with fees varying between 0.99% and 0.3% (after discounts), and 0.60%, respectively, and offering cash withdrawals.
Revised Bitcoin ETFs Projections
These Bitcoin ETFs have affordable fees, leading some investors to take notice and possibly bring more funds to manage.
Balchunas views the lower fees as a good indication for the market. By having less expensive fees, these index funds may become more attractive to investors and lead to an increase in the amount of money they manage (assets under management, or AuM).
Although there’s excitement about the upcoming Bitcoin ETFs in Hong Kong, Eric Balchunas urges a measured perspective on the expected investments in this emerging market.
Blachunas points out that these ETFs might trail behind their US equivalents, which have surpassed $200 billion in trading volume since their debut in January.
Revised estimate from Balchunas: These Hong Kong ETFs could potentially manage as much as a billion dollars in assets within their first two years, more than double the earlier prediction of half a billion dollars.
Currently, Bitcoin’s price is $66,000 when I’m writing this, representing a small 1% drop in the last day, while there’s been a closer to 3% decrease over the previous two weeks.
Although there’s been a recent development, the upcoming introduction of Bitcoin ETFs in Hong Kong has the potential to greatly influence BTC‘s price. This could potentially push it upwards towards previous record highs.
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2024-04-24 22:12