-
Hong
Kong
regulators
will
likely
approve
spot
bitcoin
ETFs
as
early
as
next
week,
Reuters
reported
Wednesday. -
The
funds
could
offer
an
alternative
to
Chinese
investors
reluctant
to
invest
in
domestic
real
estate
and
stocks,
one
observer
noted. -
“The
market
should
not
expect
flows
anywhere
near
the
size
of
U.S.
spot
ETF
flows,”
said
a
K33
analyst.
Heightened
anticipation
for
spot-based
bitcoin
ETFs
in
the
U.S.
and
the
eventual
inflows
supercharged
bitcoin’s
run-up
to
new
all-time
highs,
and
now
Hong
Kong
regulators
reportedly
are
inching
closer
to
approving
similar
funds,
news
that
thus
far
has
been
mostly
unnoticed
in
crypto
circles.
These
vehicles,
however,
could
open
the
floodgates
for
Chinese
investors
looking
for
a
new
haven
next
to
gold
and
overseas
real
estate
and
stocks
in
which
to
store
their
wealth.
“[They]
will
be
a
big
deal,”
Noelle
Acheson,
macro
analyst
and
author
of
Crypto
Is
Macro
Now
newsletter,
said
in
an
email
interview
with
CoinDesk.
“It’s
not
just
for
the
access
to
hedge
funds
and
family
offices
based
in
the
region;
it’s
also
because
of
the
access
it
gives
to
mainland
investors.”
Chinese
investors
are
reluctant
to
invest
in
domestic
real
estate
and
stocks
given
the
well-documented
troubles
of
the
country’s
housing
market,
construction
sector
and
equities.
That,
in
turn,
has
spurred
interest
in
alternative
assets
like
gold,
Acheson
explained.
Notably,
trading
with
a
gold-linked
ETF
in
China
was
halted
earlier
this
week
after
its
price
premium
reached
30%
as
investors
piled
into
the
asset
trading
at
record
high
prices.
In
similar
fashion,
there
could
be
“a
significant
flow
of
funds
into
BTC,”
Acheson
said,
adding
that
the
investment
case
for
the
largest
cryptocurrency
will
become
even
more
prevalent
if
concerns
about
further
devaluation
of
the
yuan
ramp
up.
“Chinese
authorities
most
likely
realize
that
a
significant
portion
of
their
citizens
will
be
diversifying
into
hard
assets
whether
approved
or
not,
and
would
probably
prefer
that
they
be
in
assets
not
related
to
the
U.S.
economy,”
Acheson
noted.
Markus
Thielen,
founder
of
Singapore-based
analytics
firm
10x
Research,
said
that
the
ETFs
could
raise
the
probability
of
a
Chinese
retail
buying
frenzy
similar
to
the
2013
bull
market.
Bitcoin’s
popularity
exploded
in
the
country
that
year,
driving
the
price
to
over
$1,000
from
only
$10
in
January.,
The
rally
didn’t
end
until
China’s
government
banned
financial
institutions
from
trading
the
asset
in
December.
“70%
of
Chinese
own
property
and
as
the
market
has
recently
repriced
lower
together
with
the
stock
market,
there
are
not
many
alternatives,”
Thielen
said.
“Bitcoin
is
one.”
While
the
approval
of
ETFs
could
be
a
further
positive
catalyst
for
bitcoin,
the
market
should
not
expect
flows
anywhere
near
the
size
seen
by
the
U.S.
spot
funds,
said
Vetle
Lunde,
senior
analyst
at
K33
Research.
The
two
futures-based
bitcoin
ETFs
listed
in
Hong
Kong
have
seen
“solid”
growth
this
year
more
than
doubling
their
assets
in
BTC
terms,
he
noted,
but
their
combined
size
is
less
than
2,000
BTC,
or
just
2%
of
the
U.S.-listed
futures
ETFs.
“The
small
size
of
HK
futures
ETFs
compared
to
the
U.S.
is,
in
our
opinion,
a
signal
to
the
market
that
HK
ETFs
should
see
less
exuberant
flows
than
those
witnessed
in
the
U.S.,”
Lunde
said.