Bitcoin ETF China ban is real!

YEREVAN ( — On April 17, Hong Kong celebrated the debut of its first Spot Bitcoin and Ethereum ETFs, marking a significant milestone. Yet, there’s a notable restriction: Due to stringent regulations, Mainland Chinese investors are excluded from participating. This limitation dampens the initial excitement, as it keeps these potentially lucrative investments just beyond reach.

Here Disappears Them $25B

Analysts initially predicted that Chinese investors might contribute up to $25 billion to Hong Kong’s Bitcoin and Ethereum ETFs. However, current forecasts from Bloomberg Intelligence paint a more modest picture, projecting only $1 billion in inflows over the next two years. This revised forecast is due to the limited size of Hong Kong’s market, which cannot handle such large investment volumes.

Spotlight on Bitcoin: Hong Kong ETFs to Catalyze Investment Surge – Source: @oxhak on Twitter
Spotlight on Bitcoin – Source: @oxhak on Twitter

Industry experts such as Matt Hougan, Chief Investment Officer at Bitwise, and Eric Balchunas, Bloomberg ETF analyst, offer cautious insights on the new launch. Balchunas highlights the significant disparity in market sizes between the U.S. and Hong Kong, suggesting that the expected billions in investment capital might not materialize as initially anticipated.

Asia's ETF Outlook: Balchunas Tweets on Hong Kong's Market Growth
Asia’s ETF Outlook: Balchunas Tweets on Hong Kong’s Market Growth

Hougan remarks that while positive, Hong Kong’s Ethereum and Bitcoin ETFs won’t transform the market.

Bloomberg's Bitcoin ETF Projections on Twitter
Bloomberg’s Bitcoin ETF Projections on Twitter

Balchunas echoes this sentiment, noting the stark contrast in market scales between the U.S. and Hong Kong, which suggests that the anticipated influx of billions in investment capital may not materialize.

Bitcoin ETF Offerings Limited to Institutional Investors

The primary beneficiaries of the new ETFs might be institutional investors. They gain a legitimate pathway to trade cryptocurrency, along with the advantage of extended trading hours as Hong Kong trading times align with global markets. Yet, current SEC filings show only a modest embrace of these new funds by institutions, highlighting a cautious approach to the volatile crypto sector.

Read our broader Bitcoin ETF coverages here.

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