Bloomberg analyst Eric Balchunas commented on the news about the approvals of Hong Kong spot ETFs.
Balchunas acknowledged that the exchange-traded fund (ETF) located at the designated spot has received approval for launch, but it hasn’t been made publicly available yet. The listing is anticipated to take place in the upcoming week. However, all the other issuers are considered minnows compared to BlackRock.
The most recent update on Hong Kong’s Bitcoin ETFs: They have been given the green light to exist, but have not begun operation yet. There are rumors they will launch next week to avoid clashing with a conference in Dubai. However, do not anticipate massive inflows of money. One estimation suggests $25 billion, which is unrealistic. Our prediction is that these ETFs will be fortunate to attract $500 million. Here’s why:
1. The regulatory approval for the Hong Kong Bitcoin ETFs has been granted, but they have not started trading yet.
2. There are whispers of a launch next week to avoid competing with an event in Dubai.
3. It is unlikely that these ETFs will receive significant investments right away.
4. An expectation of $25 billion in inflows is excessive and unrealistic.
5. Our estimation suggests that the Bitcoin ETFs in Hong Kong may only attract around $500 million.— Eric Balchunas (@EricBalchunas) April 15, 2024
An extra point to consider is that the Bitcoin ETF market in Hong Kong has less trading volume compared to the United States. Consequently, there will be larger price differences between the buying and selling prices (spreads) and discounts for these ETFs. Therefore, investors should anticipate higher fees of around 1% to 2% for spot Bitcoin ETFs in Hong Kong.
Balchunas pointed out that each factor would bring advantages to Bitcoin, expanding investment possibilities within the cryptocurrency market.
“I’m just pointing out that it’s easy for a child to understand the difference between ‘it’s’ and the U.S. However, some aspects may change in the future such as increased liquidity, narrower spreads, decreased fees, and larger issuers being involved. But for now, we have more moderate expectations.”
Eric Balchunas, Bloomberg analyst
April 15 saw several management firms in Hong Kong given the green light by regulators to introduce Bitcoin and Ethereum spot ETFs. In contrast to the US, which has only seen Bitcoin-focused ETFs launched in January, these Hong Kong companies were granted approval to introduce funds for both leading cryptocurrencies at once.
China Asset Management’s Hong Kong branch has been given the green light by the Securities and Futures Commission (SFC) in Hong Kong to offer retail investment services for crypto spot Exchange-Traded Funds (ETFs). Additionally, two funds belonging to Harvest Global Investments have received preliminary approval from the SFC.
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2024-04-15 19:46