The Securities and Futures Commission (SFC), Hong Kong's financial regulator, authorized last Monday the country's first-ever spot Bitcoin and Ether exchange-traded funds (ETFs). This clearance is a big step for Hong Kong's cryptocurrency markets, much as the highly anticipated Spot Bitcoin ETFs that have recently emerged in the US.
A historic moment it happened in crypto adoption in U.S. markets three months ago. After years of the Securities and Exchange Commission (SEC) rejecting applications, Ten Spot Bitcoin ETFs were given the go-ahead and started trading. Following its successful launch, the category attracted substantial investment, increasing the total assets under management for the newly formed Spot Bitcoin ETF category to almost US$60 billion.
Although the U.S. ETF market got the most significant media attention, it's important to remember that Canada was the first in this field. Global issuer Purpose Investments of Canada introduced the first-ever Spot Bitcoin ETF in 2021. Exchange-traded products (ETPs) offering comparable investment options in major cryptocurrencies, such as Bitcoin and Ether, have been available in Europe for a considerable amount of time. European issuers like 21Shares and others, crypto investors now have access to a broader range of tiny cryptocurrencies, including Litecoin, Ripple, and Solana.
The SFC has approved three ETF providers, including ChinaAMC, which is authorized to offer "virtual asset management services." ChinaAMC's plan to establish a market for the Ethereum and Bitcoin exchange-traded fund (ETF), for which OSL Digital Securities has been designated custodian, depends on this permission.
Likewise, Harvest Global and Bosera International have also secured permission to introduce their crypto ETFs, although these products have yet to be available on the crypto market.
The Hong Kong Crypto ETF does not yet have an official launch date, but experts have made preliminary predictions. OSL and other industry experts predict that Bitcoin ETFs will launch in late April. Markus Thielen, the founder of 10x Research, a crypto research company, joins in on the conversation. However, he accepts that final regulatory approval might create delays and envisions a launch date of April 30.
Experts are optimistic despite the unclear launch date and predict that these ETFs will become very popular and attract significant investments. Some investors, such as Matrixport, a Singapore-based company, estimate that mainland China could contribute US$25 billion in capital through the Southbound Stock Connect initiative.
Analyst Markus Thielen advises that China's regulations are changing and could lead to a delay of at least six months in Chinese participation. Similarly, Markus, Bloomberg ETF analyst Eric Balchunas anticipates mainland China will have a minor role because of its restriction on purchasing virtual assets.
He predicts that this could limit supply and allow Hong Kong's spot Bitcoin ETF to attract US$1 billion in investment within two years, which is significantly less than the US$60 billion US spot Bitcoin ETF can handle today.
Similar to other assets, the bitcoin price is influenced by an interplay of interconnected factors, such as geopolitical tensions, central bank policies, and economic conditions. Two things that could be good news are the introduction of new ETFs and the second Bitcoin halving event (which ended last Friday).
Despite these positive developments and Hong Kong's move to introduce a spot Ether ETF, which even outperformed the U.S., Bitcoin remained relatively unchanged over the week, trading around US$65,000 (on April 20th), well below its record high of US$74,000 a month ago.
Ether's price still needs to experience significant gains. While Hong Kong's ETF approval positions the city as a potential crypto hub, it could also pressure the U.S. SEC to revisit Ether ETFs, potentially benefiting the entire crypto industry.
Ethereum price today is trading at US$3162.5. The relative strength index (RSI) is at 52.51, while the MACD indicator is showing a bearish sign. Ethereum price has a support level of US$3076.2 and a resistance level of US$3241.3. The 20-day simple moving average (SMA) of Ethereum is currently at US$3158.8.
Join our WhatsApp Channel to get the latest news, exclusives and videos on WhatsApp
_____________
Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.