According to PANews, the Hong Kong Securities and Futures Commission (SFC) is expected to approve a spot Bitcoin (BTC) ETF in the second quarter of this year. This development could significantly change the landscape of crypto asset investments and potentially position Hong Kong as a global leader in the BTC ETF market.
Noelle Acheson, a prominent figure in the crypto asset industry and author of Current Affairs, commented on the potential impact of this move, stating that the Asian crypto asset market is much larger than the US market in terms of trading volume. She outlined two possibilities: the existing high trading volume could indicate market saturation or suggest that the Asian market is more familiar with and knowledgeable about crypto assets.
Acheson added that a Hong Kong-listed ETF could bring a large amount of capital into 'approved' investment portfolio allocations, implying a significant shift in investment flows. Bloomberg ETF expert Eric Balchunas highlighted the importance of Hong Kong approving a spot BTC ETF with physical creation and redemption, contrasting it with the US, which only allows cash subscriptions.
Balchunas said that this would help stimulate the rapidly growing asset management scale and trading volume in the region, giving Hong Kong a considerable strategic advantage. Caitlin Long, founder and CEO of Custodia Bank, also weighed in, emphasizing another key aspect of the proposed ETF structure in Hong Kong: the ability to directly extract BTC. This ensures that investors hold more than just 'paper BTC'.
Long expressed excitement about this development, stating that if a spot BTC ETF is approved in Hong Kong, it would be both huge and ironic, as US banks would be left out in the cold. The discussion around the potential of a Hong Kong BTC ETF has expanded from industry experts to the broader crypto asset community.
Well-known analyst Bitcoin Munger believes that the catalytic effect of a Hong Kong ETF would be much greater than that of a US ETF. Munger cited Glassnode data showing that the supply of BTC has been shifting from the West to the East year by year, and he believes this trend strengthens the case for a Hong Kong ETF surpassing a US ETF.
However, not everyone is convinced that a Hong Kong ETF will have a significant impact. Eric Balchunas cautioned against overestimating the market size of Hong Kong relative to the US, stating that Hong Kong is too small compared to the US. Bitcoin Munger countered that the success of a Hong Kong ETF may not yet be fully appreciated, and any positive surprises could catch analysts, including Balchunas, off guard.