tl;dr
Chinese investment giants Harvest Fund and China Southern Fund are actively pursuing spot Bitcoin exchange-traded funds (ETFs) in Hong Kong, with Harvest Fund having submitted a proposal to the Hong Kong Securities and Futures Commission. Industry analysts predict these applications could gain appro...
Chinese investment giants Harvest Fund and China Southern Fund are actively pursuing spot Bitcoin exchange-traded funds (ETFs) in Hong Kong, with Harvest Fund having submitted a proposal to the Hong Kong Securities and Futures Commission. Industry analysts predict these applications could gain approval as early as the second quarter of 2024. The move comes as investor interest in US spot Bitcoin ETFs slows, with digital asset investment products experiencing a short-term dip in inflow. The applications by reputable Chinese funds in Hong Kong could signal a bullish outlook for crypto markets and hint at a potential softening of China’s overall crypto stance. However, concerns about the long-term sustainability of Hong Kong’s favorable regulatory environment have been raised, given its autonomy under the “One Country, Two Systems” agreement with China, which is set to expire in 2047.
Two of China’s investment giants, Harvest Fund and China Southern Fund, are reportedly pursuing spot Bitcoin exchange-traded funds (ETFs) in Hong Kong. This move coincides with decreasing investor interest in US spot Bitcoin ETFs, as evidenced by decelerating weekly inflows.
Securities Time reports Hong Kong subsidiaries of both Harvest Fund and China Southern Fund are actively participating in the Bitcoin ETF application process. Additionally, they are engaged in the deployment process. Harvest Fund, in particular, has submitted a proposal for a spot Bitcoin ETF with the Hong Kong Securities and Futures Commission (SFC). Additionally, China Asset Management’s Hong Kong arm has partnered with a Hong Kong-based Bitcoin ETF custodian.
Industry analysts predict these applications could gain approval as early as the second quarter 2024. With $230 billion and $280 billion in managed assets, respectively, Harvest Fund and China Southern Fund would significantly elevate participation in Bitcoin-related investment products. The timing aligns with a report from CoinShares noting “signs of ETF hype moderating.” Last week, the inflow of digital asset investment products, including US-approved spot Bitcoin ETFs, amounted to only $646 million. This number reflects a decrease from $862 million two weeks earlier.
Despite this short-term dip, year-to-date inflow figures for digital asset investment products show growth. Two weeks ago, the total inflow stood at $13.14 billion; last week, this rose to $13.81 billion.
Applications for spot Bitcoin ETFs in Hong Kong by reputable Chinese funds could be a bullish signal. Hong Kong’s determination to establish itself as a crypto hub, plus its unique relationship with China, hints at a potential softening of China’s overall crypto stance. This could have far-reaching positive implications for crypto markets. Moreover, key industry figures have praised Hong Kong’s regulatory clarity.
Yet, Hong Kong’s autonomy under the “One Country, Two Systems” agreement with China will expire in 2047. This raises questions about the long-term sustainability of Hong Kong’s favorable regulatory environment. Bobby Lee, Ballet founder and CEO, expressed this concern during an interview, questioning the pace of Hong Kong-China integration over the next 23 years, highlighting the eventual unification of currencies and systems and, potentially, surveillance under a single framework.
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