Hong Kong’s Bitcoin ETF Pursuit
Hong Kong is preparing to accept applications for Bitcoin ETFs, following the United States Securities and Exchange Commission’s (SEC) approval of the first spot Bitcoin ETF product. The Hong Kong Securities Futures Commission (SFC) is ready to meet its market liquidity goals by allowing investors to gain exposure to BTC through these funds.
The Unique Twist: China’s Approval
Gabor Gurbacs, founder of PointsVille and advisor to Tether and VanEck, explains that Hong Kong cannot approve Bitcoin ETFs without China’s approval due to their strong affiliations. This is interesting considering China’s anti-crypto stance and ban on Bitcoin and crypto-related mining. However, Gurbacs believes that China wants to compete in the institutional Bitcoin adoption game.
As I said many times, the East-West Bitcoin ETF competition is heating up. Hong Kong wouldn’t launch Bitcoin ETFs without China’s approval. China is determined to put up competition on institutional Bitcoin capabilities. Full nation state adoption game theory in effect.
— Gabor Gurbacs (@gaborgurbacs) January 10, 2024
China’s Role in the Bitcoin ETF War
Despite China’s negative stance on Bitcoin, it is willing to support initiatives that attract institutional capital. Just as the US and China are in conflict in terms of trade and technology, a Bitcoin ETF war is brewing, with Hong Kong serving as the bridge.
Long Term Survival: US vs. China
The US, being the largest economy with the biggest capital markets, has an advantage in terms of history, know-how, and financial giants ready to embrace the Bitcoin ETF. While Vanguard has chosen not to participate, reasonable capital is expected to flow into the market. China, on the other hand, will need to catch up despite opening its arms to retail Bitcoin participation last year.
Hot Take: The Battle for Bitcoin ETF Supremacy
The approval of the first spot Bitcoin ETF in the US and Hong Kong’s readiness to accept applications for Bitcoin ETFs indicate a global competition for supremacy in this market. With China aiming to compete with institutional Bitcoin adoption and the US having a head start, it will be interesting to see how this battle unfolds and which country emerges as the dominant player in the long term.
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