Local Chinese investors are causing a heated gold stock ETF market with intense buying, pushing the price up an astonishing 30%. This frenzy resulted in trading being temporarily suspended. According to Bloomberg analyst Eric Balchunas, the desire to avoid missing out on potential gains from a Bitcoin ETF may be fueling this behavior.
Bloomberg Explains Effect Of Bitcoin ETF FOMO On Gold Funds In China
In a recent article on X, Balchunas expressed how Chinese investors are increasingly eager to seek investments outside of their struggling domestic economy and stock market. He noted, “Their desperation is so great that they’re scouring for investments unconnected to their own economy or stock market, which have been performing poorly.”
Chinese investors are increasingly drawn to investments seen as more secure or unconnected to their domestic economy. The lack of availability of Bitcoin ETFs in China is worth noting in this regard. As Balchunas explains, “Buying Bitcoin ETFs is currently prohibited in China.”
In addition, the analyst expressed his belief that Chinese investors’ strong desire not to miss out (FOMO) on the price increases of gold and US stocks could lead them to be extremely interested in Bitcoin ETFs. This interest is highlighted by the significant premium of 30.49% for gold ETFs in China.
Chinese investors may now gain access to Spot Bitcoin ETFs as mainland fund managers have submitted applications for approval. Yet, these ETFs will only be accessible through the investors’ Hong Kong subsidiaries, thereby excluding mainland China-based investors from directly investing in them.
Hong Kong To Allow Bitcoin Exchange-Traded Funds?
More recently, there has been a growing trend among hedge fund companies, such as Harvest Fund and Southern Fund, to make use of their Hong Kong branches in order to access Spot Bitcoin ETFs. As mentioned in the Securities Times, these institutions are actively investigating the possibility of Bitcoin ETFs in Hong Kong.
Additionally, Harvest Fund has submitted an application to the Hong Kong Securities and Futures Commission for a Bitcoin spot exchange-traded fund (ETF). It’s also anticipated that Bitcoin ETF proposals could emerge as soon as the second quarter of this year, according to industry insiders.
The industry forecast highlights the strong growth momentum in Hong Kong, positioning it as a potential crypto hub. Southern Fund’s subsidiary, Southern Dongying, has been a trailblazer in China’s public offering sector with innovative product offerings like QDII. Furthermore, they aim to take the lead in the Bitcoin ETF market, signaling an important achievement for the cryptocurrency world.
Through introducing the first crypto Exchange-Traded Fund (ETF) in Asia, Southern Dongying has taken the lead in this developing market. The debut of Southern Dongying’s Bitcoin Futures ETF and Ethereum Futures ETF in Hong Kong will boost Bitcoin acceptance even more. Additionally, it might trigger a rise in Bitcoin’s price trend.
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2024-04-08 18:43