Spot Bitcoin ETFs Listed In Hong Kong Could Receive $25B From Investors – Crypto Firm

Hong Kong, a special administrative region in China, is widening its crypto adoption by including additional products. The region is preparing to approve a spot Bitcoin ETF, expected to attract about $25 billion from Chinese investors. 

Based on reports from a crypto firm, the ETF listing will come through the Southbound Stock Connect Program. 

Hong Kong-listed Bitcoin ETFs To Unlock Billions Of Dollars

A Singapore-based crypto company, Matrixport, disclosed Hong Kong’s moves regarding spot Bitcoin exchange-traded funds (ETFs) on Friday, April 12. According to the details, Southbound Stock Connect will provide qualified mainland Chinese investors access to eligible shares listed in Hong Kong.

Matriport stated:

“A likely approval of Hong Kong-listed Bitcoin spot ETFs could attract several billion dollars of capital as mainland investors take advantage of the Southbound Connect program, which facilitates up to 500 billion RMB (HK$540 billion and $70 billion) per year in transactions.”

Further, the crypto firm noted that the venture will open up about $24 billion available capacity for the HK Bitcoin ETFs.

The firm estimated using the unused annual Southbound Connect quota. Based on a blue-sky assumption, the average of this quota over the past three years would go into the ETFs.

Also, mainland Chinese investors could amass several Chinese stocks worth HK$540 billion yearly through the Southbound Connect program. Notably, data from 360MarketIQ showed there was a gradual drop in flows within the past three years.  

The value moved from HK$450 billion to HK$400 billion and HK$320 billion, dipping below the limit by HK$100 to HK$200 billion ($15 billion to $25 billion).

Based on that, Matrixport explained, “Hence there is potentially HK$100 billion to HK$200 billion in quota left for bitcoin ETF investment flows – if the approval occurs without any restrictions. HK$200 is the equivalent of $25 billion,” 

Chinese Seeks Alternative Assets For Diversification

Meanwhile, mainland China is showing interest in other alternative assets. The recent increase in gold prices in Shanghai serves as evidence for investment diversification.

Notably, the value of the yuan has plummeted by almost 2% against the USD. The decline spread two years of losses that slowed down the economy and reduced trading profits.

According to Matrixport, China’s RMB has hit a 17-year low compared to the USD. This drop supports the country’s increasing demand for diversification.

While many diversify to gold, several prominent personalities and firms are showing interest in the upcoming listing of Bitcoin ETFs. The COO of ContentFi Labs, Nick Ruck, confirmed that mainland funds have an interest in issuing ETFs in Hong Kong.  

According to Ruck, several applications have been made for spot BTC ETFs through the fund’s subsidiaries in Hong Kong. He noted that getting approval would enable greater access to Bitcoin for qualified mainland investors.

Similarly, Nikkei Asia reported new applications for spot ETFs in Hong Kong by some prominent companies. The firms are Chinese brokerage GF Holdings-owned Value Partners and a top fund manager, Harvest Global Investment.