ETF Bitcoin is coming soon to China

The endorsement of Bitcoin ETFs by the SEC could break the ice in Asia. It is rumored that Hong Kong will follow before summer.

A Bitcoin ETF in Hong Kong

Bitcoin has been climbing relentlessly since the launch of the American ETFs. BlackRock’s blessing has dispelled many hesitations.

Now, several hundred million dollars are flowing in every day through about ten ETFs. These have already absorbed 829,000 bitcoins. Of which 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 by the end of 2025. Put another way, it will have to attract about an additional $64 billion by then.

Possible, especially if ETFs are launched in Asia, and particularly in China, via Hong Kong. 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, is already in line. For Rebecca Sin, ETF analyst at Bloomberg Intelligence, it’s just a matter of time.

It would be “huge” if Hong Kong approved Bitcoin ETFs, Noelle Acheson told Coindesk. “The Asian market is much more significant than the US market in terms of volume”.

True, but let us remember that all Hong Kong ETFs are valued at $450 billion, versus $6,400 billion in the United States…

That said, the Chinese appetite for Bitcoin is real. China used to host 50% of the hashrate before the “ban” of 2021 (20% today). Moreover, it is mainly Chinese companies (Bitmain and MicroBT) that manufacture the ASICs used to mine bitcoins.

Big in Japan?

Being the leading financial hub in Asia, these new ETFs could push other regional financial giants to take action.

Japanese exchanges like BitFlyer or Huobi are divided on whether to encourage the emergence of ETFs. They fear losing market share to American ETFs that use the services of the Coinbase exchange.

Furthermore, the tax on Bitcoin capital gains is 55%, whereas it would only be 20% for ETFs. The Japan Cryptoasset Business Association is lobbying for equalization of taxation regimes before taking action.

Bloomberg reports that South Korean and Taiwanese regulatory authorities are under pressure to allow purchases of shares in American ETFs. All eyes are on the Taiwan Chamber of Commerce, which will publish a report on Bitcoin ETFs in April.

In Japan, even the Japanese government’s pension fund ($2 trillion) is exploring the possibility of investing in bitcoin. The South Korean pension fund has already purchased shares in the Coinbase exchange.

So far, the overall opinion of Asian policymakers has remained hostile towards Bitcoin, still seen as a threat. But the lines are shifting since the United States overcame its anxiety thanks to Michael Saylor.

Fiat and Bitcoin can only coexist. Concerns are exaggerated. On this note, don’t miss our article: According to Saylor, Bitcoin does not need to replace fiat currency.