The endorsement of Bitcoin ETFs by the SEC could settle things in Asia. It is rumored that Hong Kong will give the green light before June.
A Bitcoin ETF in Hong Kong
Bitcoin has continued to appreciate since the launch of ETFs. BlackRock's blessing dispelled many hesitations.
Now, several hundred million dollars flow in every day through around ten ETFs. The latter have already absorbed 829,000 bitcoins. Including 87% by BlackRock, Fidelity and Grayscale.
At the current rate, Standard Chartered Bank believes bitcoin will hit $250,000 by the end of 2025. But it will need to attract about $64 billion more.
We should get there, especially if ETFs are launched in Asia, and particularly in China via Hong Kong. However, according to Bloomberg Intelligence, the Hong Kong Securities and Futures (SFC) will authorize Bitcoin ETFs in the second quarter.
China's ninth largest investment fund, Harvest Global, has already filed for an ETF following the SFC's appeal last December. It's only a matter of time according to Rebecca Sin, ETF analyst at Bloomberg Intelligence.
It would be ” huge “ if Hong Kong approved bitcoin ETFs, says Noelle Acheson at Coindesk. “The Asian market is much larger than the American market in terms of volume”.
Note, however, that all Hong Kong ETFs weigh 450 billion dollars, against 6,400 billion in the United States…
That said, the Chinese appetite for bitcoin is real. China was home to 50% of the hashrate before the 2021 ban, compared to 20% today. Let's also not forget that it is Chinese companies (Bitmain and MicroBT) which manufacture most of the ASICs used to mine bitcoins.
Big in Japan?
Hong Kong being the leading Asian financial center, these new ETFs could force the hand of other Asian financial centers.
Japanese exchanges like BitFlyer and Huobi are divided on whether to put pressure on the government. The reason being that they could lose market share if the door is opened to US ETFs. The latter in fact use the services of the Coinbase exchange.
Additionally, the capital gains tax on Bitcoin is 55%, while it would only be 20% for ETFs. The Japan Cryptoasset Business Association suggested earlier this year that tax regimes should be equalized before taking action.
Bloomberg reports that regulators in South Korea and Taiwan are under pressure to reconsider restrictions on U.S. ETFs. Taiwan Chamber of Commerce will publish a study on Bitcoin ETFs in April.
In Japan, it is neither more nor less than the Japanese government pension fund ($2,000 billion) which studied the possibility of investing in bitcoin. The South Korean pension fund, the National Pension Service, bought shares of Coinbase last year.
Until now, the overall opinion of Asian decision-makers remained hostile to bitcoin, still perceived as a threat. The United States overcame these fears thanks to Michael Saylor who clearly articulated that bitcoin does not need to replace fiat currency to succeed.
Fiat and Bitcoin can only coexist. You do not have to be afraid. On this subject, don’t miss our article: For Saylor, bitcoin does not need to replace fiat currency.
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