Analysts "dampen" excitement over ETF spot wave in Hong Kong
According to Bloomberg analysts, the approval of cryptocurrency-related investment products in Hong Kong marks a positive development, yet remains modest compared to the US ETF market.
Analysts "dampen" excitement over ETF spot wave in Hong Kong. Image: CryptoSlate
As reported by Coin68 yesterday afternoon (15/04), Hong Kong officials have officially "cleared" a series of applications for Bitcoin and Ethereum spot ETFs from issuers including China Asset Management, Harvest Global, Bosera, and HashKey. However, no major player like BlackRock has entered the field.
Latest on HK spot Bitcoin ETFs: They have been approved to exist but not launch (yet). Rumor has it launching next wk so to not compete w Dubai conf. Don't expect a lot of flows (I saw one estimate of $25b that's insane). We think they'll be lucky to get $500m. Here's why:
— Eric Balchunas (@EricBalchunas) April 15, 2024
1. HK…
Following these actions, various comments have surfaced, notably from Bloomberg analyst Eric Balchunas.
While acknowledging cryptocurrency investments in Hong Kong as a positive step, he remains cautious about the current wave of excitement, stating:
"Don't expect much, I think attracting around $500 million in assets would be high. The Hong Kong ETF market is still small, and mainland Chinese locals can't buy these, at least not officially."
Since their official US trading debut earlier this year, Bitcoin spot ETFs have generated over $200 billion in trading volume.
Source: The Block
Meanwhile, products issued by financial giants such as BlackRock and Fidelity have garnered around $30 billion in capital.
Source: The Block
On the other hand, the Securities and Exchange Commission (SEC) is expected to make a final decision by the end of next month on whether to approve Ethereum spot ETF funds. Unlike past optimism regarding Bitcoin products, analysts including Eric Balchunas are pessimistic about upcoming Ethereum funds.
In conclusion, the Bloomberg expert clarifies that his viewpoint should not be construed negatively.
"All of this is giving positive signals for Bitcoin as it opens up more investment opportunities. My point is just about the comparison with the US, as this market is still developing and may not have as low transaction fees as in the US."
