## Anticipation Grows for Potential Approval of Hong Kong Bitcoin ETF
Investor optimism is building over the possible approval of a Hong Kong Bitcoin spot Exchange-Traded Fund (ETF) as early as next week. Experts suggest that if approved, the ETF could channel a significant amount of mainland capital into Bitcoin.
According to a report by CoinDesk US on October 11, the ETF could provide Chinese investors, who are seeking new investment avenues away from domestic real estate and gold, with a fresh opportunity. Amid economic challenges in China, including troubles in the property and construction sectors and a decline in the stock market, interest in alternative assets like gold has surged.
Macro analyst Noelle Acheson pointed out that Chinese investors have increasingly shied away from these troubled sectors. She noted a recent instance where an ETF product linked to gold attracted massive investments, reaching record highs and leading to trading halts. Acheson mentioned that Bitcoin could experience a similar inflow of funds, especially if concerns over further yuan devaluation grow.
Acheson added, “Chinese authorities recognize that a significant portion of their population will diversify their investments into physical assets, regardless of the approval status of the ETF. They are likely to prefer assets unrelated to the US economy.”
Markus Thielen of Singapore-based 10x Research predicted that the approval of a Hong Kong Bitcoin spot ETF could trigger an investment craze reminiscent of the 2013 bull market led by retail investors. In that year, Bitcoin prices in China soared from $10 to over $1,000, with the rally continuing until the Chinese government imposed regulatory measures on Bitcoin trading in December.
Thielen highlighted, “With 70% of Chinese owning property and recent market declines, their investment options are limited.”
However, Bendik Runde, lead analyst at K33 Research, cautioned that while Hong Kong’s ETF approval could be a positive catalyst for Bitcoin, it might not attract inflows comparable to those seen in the US. He noted that although two Bitcoin futures ETFs listed on the Hong Kong Stock Exchange more than doubled their assets this year, their total size remains under 2,000 BTC, just 2% of the futures ETFs listed in the US.
Despite these caveats, the growth trajectory of Bitcoin ETFs in Hong Kong indicates a robust interest and significant potential for expansion.
