Hong Kong, known as a global financial center and a conduit for Chinese investments abroad, appears on the verge of greenlighting a spot Bitcoin exchange-traded fund (ETF) closely linked to Bitcoin (BTC), the world's largest cryptocurrency.
Hong Kong Bitcoin ETFs Ready to Meet $25 Billion Demand
Anticipating this move, Singapore-based crypto services provider Matrixport predicts that such an investment vehicle could trigger a surge in demand of up to $25 billion from Chinese investors through its Southbound Stock Connect program.
This initiative allows qualified Chinese investors to access eligible shares listed on the Hong Kong stock exchange.
“A possible approval of Bitcoin Spot ETFs listed in Hong Kong could attract billions of dollars of capital as Chinese investors take advantage of the Southbound Connect program,” Matrixport's report said.
With an annual transaction capacity of up to RMB 500 billion (equivalent to $70 billion), the program holds significant potential for the BTC ETF market.
Estimating potential demand, Matrixport's analysis shows that as much as 200 billion Hong Kong dollars (about $25 billion) of the Southbound Connect program's unused quota over the past three years could become available for investment in Hong Kong-based Bitcoin ETFs.
The regulatory green light for these spot ETFs remains uncertain, especially in terms of accessibility for Chinese investors.
However, recent trends exemplified by the rise in gold prices on the Shanghai stock exchange indicate mainland China's interest in diversifying into alternative assets.
It is not investment advice.
