Hong Kong’s spot Bitcoin and Ethereum exchange-traded funds (“While no trading date has been set, expectations are for April 30,” said 10x Research founderThielen’s comments come the day after Hong Kong gave As a result of the The Shanghai Stock Exchange’s southbound stock connect allows qualified mainland China investors to access eligible Hong Kong financial assets. The southbound connect has a daily quota of ¥42 billion—and if exceeded, trades will be rejected. But in recent years, this quota hasn’t been reached. “This program allows mainland investors to buy up to ¥500 billion ($69 billion USD) of Hong Kong-listed stocks annually—or equivalent to HK$540 billion annually,” Thielen told “If Chinese investors could buy,” he added, “this is how much mainland investors could allocate—as an upper limit.”However, this future seems unlikely for now, as Thielen believes that the ETFs will not become part of the southbound program for at least six months.“Most market participants expect Chinese mainland investors to be unable to buy these products and that they will not be added to the southbound connect program,” Thielen explained. “Currently, Hong Kong ETFs need to have been listed for six months, but regulation could always change.”That said, Thielen suggested that due to “China’s property worries” and decade-long weakness in the stock market, the country could look to Bitcoin to diversify its assets.“Although some forms of Bitcoin activities are Despite Since then, Hong Kong has positioned itself as the “Nothing happens in Hong Kong without China’s blessing—not even a raindrop,” Thielen added. “So when the two leading financial market authorities (HKMA and SFC) approve Bitcoin and Ethereum ETFs, there must be a conscious decision and a calculation around the impact this might have.”However, Thielen suggested that this might not be as bullish as many crypto enthusiasts first thought, due to cultural differences in investing. “ETFs have limited success in Asia as investors like to take direct/concentrated bets, instead of buying a basket of something,” he said. However, in this case, as the ETFs represent a single asset rather than 10 to over 100 stocks, it’s much closer to being a direct bet.“Therefore, the success rate could be much larger than that of other basket-time ETFs,” he added.Edited by Andrew HaywardDisclaimerThe views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.
