ETF Bitcoin are coming soon to China

The endorsement of Bitcoin ETFs by the SEC could unlock developments in Asia. There are whispers that Hong Kong will give the green light before June.

A Bitcoin ETF in Hong Kong

The bitcoin continues to appreciate ever since the launch of ETFs. The blessing of BlackRock has cleared up many hesitations.

Now, several hundred million dollars are flowing in every day through a dozen ETFs. These have already absorbed 829,000 bitcoins, with 87% by BlackRock, Fidelity, and Grayscale.

Les 10 ETF Bitcoin américains ont attiré 11 milliards de dollars depuis le 11 janvier (en net).

Ils détiennent collectivement 839 000 BTC représentant ~ 60 milliards de dollars. pic.twitter.com/pJtTYVqn9h

— Nicolas Teterel / PAX (@NTeterel) March 27, 2024

At the current rate, Standard Chartered Bank believes that bitcoin will reach 250,000 dollars by the end of 2025. But it will require attracting approximately 64 billion dollars more.

We should get there, especially if ETFs are launched in Asia, and particularly in China through Hong Kong. Indeed, according to Bloomberg Intelligence, the Hong Kong Securities and Futures Commission (SFC) will authorize Bitcoin ETFs in the second quarter.

The ninth-largest Chinese investment fund, Harvest Global, has already filed an ETF application following the SFC’s nod in December last year. 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 to Coindesk. “The Asian market is much bigger than the American market in terms of volume”.

However, it should be noted that all of the Hong Kong ETFs together weigh 450 billion dollars, against 6,400 billion in the United States…

That said, the Chinese appetite for bitcoin is real. China housed 50% of the hashrate before the 2021 “ban”, compared to 20% today. Let’s not forget that it is Chinese companies (Bitmain and MicroBT) that manufacture most of the ASICs used for bitcoin mining.

Big in Japan?

Being the leading financial center in Asia, these new ETFs could force other Asian financial centers to act.

Japanese exchanges like BitFlyer or Huobi are split on whether to pressure the government. The reason being that they might lose market share if the door is opened to American ETFs. The latter indeed use the services of the exchange Coinbase.

Moreover, the capital gains tax on Bitcoin is 55%, whereas it would only be 20% for ETFs. The Japan Cryptoasset Business Association suggested earlier this year that tax regimes should be equalized before acting.

Bloomberg reports that South Korean and Taiwanese regulatory authorities are under pressure to reconsider restrictions on American ETFs. The Taiwan Chamber of Commerce will publish a study on Bitcoin ETFs in April.

In Japan, it is none other than the Japanese government’s pension fund (2 trillion dollars) which is exploring 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 policymakers has remained hostile to bitcoin, still perceived as a threat. The United States has overcome these fears thanks to Michael Saylor who has clearly articulated that bitcoin does not need to replace fiat currency to succeed.

Fiat and Bitcoin can only coexist. There is no need to be afraid. On this note, do not miss our article: For Saylor, bitcoin does not need to replace fiat money.