Competition between US and China
The cryptocurrency community is buzzing with excitement following reports that the Hong Kong government is considering the launch of a spot cryptocurrency exchange-traded fund (ETF), especially as the US continues to face regulatory pushback. BitMEX co-founder Arthur Hayes believes that Hong Kong's potential entrance into spot crypto ETFs could have significant implications in the ongoing economic confrontation between the US and China, ultimately benefiting Bitcoin (BTC).
Competition is good for Bitcoin
Hayes expressed his excitement over the competition between the two economies on social media, highlighting the importance of China having its own proxy asset manager launching an ETF. He believes that the economic war between the US and China is ultimately positive for Bitcoin.
Pressure on the SEC
Coin Bureau, a prominent cryptocurrency brand, pointed out that the US Securities and Exchange Commission (SEC) may face pressure from other jurisdictions, such as Hong Kong, as they embrace the idea of a spot Bitcoin ETF. The Coin Bureau stated that if the SEC continues to stifle capital market innovation in the US, other countries will step in to fill the void.
China doesn't want to miss out
Crypto influencer Lark Davis emphasized that the Chinese government is eager to participate in the crypto market opportunities. He stated that the news of Hong Kong potentially launching spot Bitcoin ETFs shows that China doesn't want to miss out on the action.
Potential move into spot Bitcoin ETFs
Hong Kong is considering allowing retail investors to access spot ETFs linked to cryptocurrencies like Bitcoin, as long as regulatory concerns are addressed. This development comes as at least a dozen investment firms in the US are seeking to launch similar products, despite resistance from the SEC. While both Hong Kong and the US have approved crypto ETFs linked to futures contracts, they have yet to approve a spot crypto ETF. A spot Bitcoin ETF directly holds BTC, providing investors with exposure to the asset.
Current state of crypto ETFs in Hong Kong
Hong Kong launched futures-linked crypto ETFs in late 2022 and currently has about $65 million in crypto ETF assets, according to Bloomberg. However, these futures crypto ETFs have seen limited demand compared to other global crypto funds. In June 2023, the Hong Kong and Shanghai Banking Corporation reportedly allowed its customers to buy and sell Bitcoin and Ether (ETH)-based ETFs.
Regulatory authority of SEC Chair Gary Gensler
With the ongoing discussions surrounding crypto regulation, many are wondering if SEC Chair Gary Gensler has the final say on the matter.
