Two large Chinese investment companies, Harvest Fund and China Southern Fund, are reportedly pursuing a spot Bitcoin exchange-traded fund (ETF) in Hong Kong.
This move is consistent with declining investor interest in US spot Bitcoin ETFs, as evidenced by a decline in weekly inflows.
Chinese investment giant pays attention to Hong Kong Bitcoin ETF
Securities Time reported that Harvest Fund and China Southern Fund’s Hong Kong subsidiaries are actively participating in the Bitcoin ETF application process. They also participate in the deployment process.
In particular, Harvest Fund submitted a proposal for a spot Bitcoin ETF to the Hong Kong Securities and Futures Commission (SFC). Additionally, China Asset Management’s Hong Kong branch has partnered with a Hong Kong-based Bitcoin ETF custodian.
Read more: How to Trade Bitcoin ETFs: A Step-by-Step Approach
Industry analysts expect these applications could win approval as early as the second quarter of 2024. Harvest Fund and China Southern Fund, with assets under management of $230 billion and $280 billion respectively, will significantly increase their participation in Bitcoin-related investment products.
The timing coincides with a report from CoinShares that noted “signs of easing ETF hype.” Last week, inflows into digital asset investment products, including spot Bitcoin ETFs approved by the U.S., amounted to only $646 million. This figure is down from $862 million two weeks ago.
Despite this short-term decline, annual inflows into digital asset investment products are on the rise. Two weeks ago, total inflows were $13.14 billion. Last week, this amount increased to $13.81 billion.
A reputable Chinese fund applying for a spot Bitcoin ETF in Hong Kong could be a bullish sign. Hong Kong’s determination to establish itself as a cryptocurrency hub and its unique relationship with China suggest a potential softening of China’s overall cryptocurrency stance.
This could have far-reaching positive implications for the cryptocurrency market. Moreover, key industry figures praised Hong Kong’s regulatory clarity.
However, Hong Kong’s autonomy under the ‘One Country, Two Systems’ agreement with China expires in 2047. This raises questions about the long-term sustainability of Hong Kong’s favorable regulatory environment.
Read more: Cryptocurrency regulation: what are the pros and cons?
Ballet founder and CEO Bobby Lee expressed these concerns in an interview with BeInCrypto in August 2023. Lee questioned the pace of Hong Kong-China integration over the next 23 years, emphasizing the eventual unification of currencies and systems and potentially oversight under a single framework.
“The question is what will happen (in Hong Kong) over the next five years. Next 10 years? Next 20 years? Or over the next 24 years? Will it change? “I think (Hong Kong’s regulatory environment) will change,” Lee said.
disclaimer
In compliance with Trust Project guidelines, BeInCrypto is committed to unbiased and transparent reporting. These news articles aim to provide accurate and timely information. However, before making any decisions based on this content, readers are encouraged to check the facts and consult with experts. Our Terms of Use, Privacy Policy and Disclaimer have been updated.