• 26 May, 2024
News

Hong Kong Launches Landmark Bitcoin ETFs, But Global Crypto Inflows Cool

A recent report by Coinshares revealed a significant pullback in cryptocurrency investment products. Over the past week, outflows totaled $435 million, with Bitcoin ETFs experiencing the brunt of the selling pressure, especially in the US. This coincides with a 6% correction in Bitcoin’s price.

Despite the global slowdown, Hong Kong is poised for a crypto surge. The region launches its first-ever “in-kind” Bitcoin ETFs on April 30, allowing investors to directly hold underlying Bitcoin assets. This innovation has the potential to be a game-changer for Asian crypto adoption.

Recently, it was reported that a significant surge in Ethereum purchases by eight whales. This buying spree followed Hong Kong’s approval of Bitcoin and Ethereum exchange-traded funds (ETFs). These whales collectively invested $31.88 million in USDT and USDC, acquiring a total of 9,787 Ethereum units.

Market watchers anticipate a fierce price war among issuers like Bosera, ChinaAMC (Hong Kong), and Harvest Fund. Harvest Fund has already taken the lead by offering the lowest fee at 0.3%, potentially igniting a race to the bottom for fees and attracting more investors.

Analysts like Willy Woo point to Asia’s massive crypto user base, highlighting the region’s immense potential for Bitcoin ETF adoption. However, initial inflow projections remain conservative. Bloomberg estimates suggest a cumulative total of $1 billion in assets under management (AUM) within two years for Hong Kong’s Bitcoin ETFs.

Adding fuel to the regional fire, Australia’s stock exchange (ASX) might soon list new spot Bitcoin ETFs. This development could further solidify the Asia-Pacific (APAC) region as a significant player in the global crypto market.

Bitcoin’s price currently sits around $60.8K, confined within a well-defined range. The upcoming US Federal Reserve meeting is expected to cast a long shadow, potentially causing short-term volatility in the market. Analysts are unsure whether the market will react positively or negatively to the Fed’s decision, but volatility seems likely.

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