With the launch of Bitcoin and Ether ETFs in Hong Kong last week, speculations are rife about whether China will be willing to loosen the rules for their mainland investors when it comes to crypto trading.
Recently, Hong Kong saw the launch of six spot Bitcoin and Ether ETFs, making it Asia’s first spot cryptocurrency ETF. However, their debut was marked by a lukewarm response as a total trading volume of just $12.4 million was recorded on the first day in Hong Kong. The value of Bitcoin also dropped following the timid response by investors who are wary of China’s stance on crypto trading.
However, the crypto community has not lost all hope as they fan speculations that China could be willing to relax its stringent rules when it comes to crypto. China has banned crypto trading and mining for its mainland citizens and any crypto-related trade activities are not protected under the Chinese laws.
Given that Hong Kong is a specially administered zone controlled by China, the crypto community is wondering whether the “Stock Connect” program could come to the rescue. Stock Connect is a program that allows investors to trade eligible shares across borders between the Shenzhen and Hong Kong stock exchanges.
Richard Byworth, an investor in BTC, hinted that these ETFs could soon be available to mainland China investors. He mentioned the possibility of Bitcoin ETFs being added to Stock Connect.
Brian HoonJong Paik, from SmashFi, also chimed in, suggesting that China’s government might be considering alternative assets like Bitcoin ETFs to ease social and economic concerns.
He added, “70% of Chinese wealth is in real estate and there are now 100 million empty homes. The CCP needs an alternative asset to mitigate social unrest.”
In essence, the launch of BTC and ETH ETFs in Hong Kong is not just about trading opportunities but also about the potential for broader market access and the evolution of investment options in the region.
If China warms up to Bitcoin ETFs, it could be a strategic move to diversify investment options, reduce reliance on real estate, and potentially ease social tensions. While banning crypto trading, China had given the rationale that it was securing its citizens from financial crimes and financial instability.
However, with the growth prospect of the Crypto market in Asia, China could very well become the gateway for Asia that the crypto community is waiting for. By offering alternative assets like ETFs, the government can provide avenues for wealth growth and stability, which could benefit both investors and society.
Also Read: Hong Kong Crypto ETFs Flop in Debut, Trading at $11 Million
