Asia Continues to Develop in the Crypto Sector
Hong Kong launches Bitcoin and Ether ETFs, amidst diverse crypto developments and innovations in Asia.
HK is first spot IN-KIND ETF. Meaning you can deposit your bitcoin without incurring a taxable event and borrow against your shares from a bank. This unlocks MASSIVE amounts of new capital from bitcoin natives and og Chinese miners. NOT PRICED IN https://t.co/WiewrC3DBK
— David Bailey $0.65m/btc is the floor (@DavidFBailey) April 18, 2024
Hong Kong’s financial landscape is about to transform significantly with the introduction of new Bitcoin and Ether ETFs. The city’s Securities & Futures Commission (SFC) has recently given the green light to these spot ETFs, raising questions about their potential impact on the Asian investment market. Will these ETFs be a game-changer, ushering in substantial capital inflow from Asian investors, or will they fade into obscurity in the vast financial sector?
Leading Chinese asset management firms, including Harvest Fund Management, Bosera Asset Management, and China Asset Management (ChinaAMC), are poised to launch these pioneering crypto asset ETFs. In a strategic collaboration with HashKey Capital based in Hong Kong, Bosera aims to spearhead the rollout of its spot crypto ETFs. Additionally, OSL Digital Securities will provide sub-custodial services for both ChinaAMC and Harvest, setting them apart from their U.S. counterparts by allowing settlements in both fiat money and kind. This capability enables investors to directly exchange their ETF shares for Bitcoin and Ether, thus enhancing liquidity and facilitating continuous trading flows, as highlighted by Patrick Pan, the CEO and chairman of OSL.
Operational Details and Market Predictions
The Stock Exchange of Hong Kong is currently finalizing the listing procedures, with the entire process expected to take about two weeks following the SFC’s approval. This development coincides with the approval of Eddid Financial as the third securities firm to offer crypto ETF trading services. This firm plans to cater to the broader retail market by providing product distribution services and facilitating the creation and redemption of crypto ETF units.
While some market analysts predict that these ETFs could potentially attract up to $25 billion in inflows, skepticism remains. Mainland China investors are currently restricted from purchasing virtual assets like those listed in Hong Kong due to a $50,000 annual cap on transferring money out of Mainland China. This restriction might significantly limit the participation of Chinese investors in these ETFs, as noted by Bloomberg ETF analyst Eric Balchunas. He anticipates that the Hong Kong crypto ETFs could attract approximately $1 billion within two years, a figure modest compared to the over $50 billion managed by U.S. spot Bitcoin ETFs. Notably, the U.S. is still deliberating on the approval of a spot Ether ETF, facing more stringent regulatory challenges.
Now for some good news re HK, our asset estimate is now $1b in first two years (which is healthy IMO but still nowhere near the $25b that some have said) but a lot depends on infrastructure improvement. We also think this helps HK as ETF leader in Asia region via @RebeccaSin_SK pic.twitter.com/5TiFLP72MB
— Eric Balchunas (@EricBalchunas) April 17, 2024
Other Crypto Developments in Asia
Switching focus to the crypto exchange sector in Asia, KuCoin has reported a significant growth trajectory in the first quarter of 2024. The exchange saw its registered users climb to over 32 million, marking a 4.32% increase from the previous quarter. Additionally, its spot trading volume saw an impressive 122% rise. KuCoin’s innovative approach included the introduction of 1.3 million custom trading bots, generating over $5 billion in trading volume.
The quarter also featured KuCoin’s response to legal challenges, including a criminal indictment and civil charges in the U.S. In a move to compensate its users for temporary withdrawal delays, the exchange executed a $20 million airdrop, benefitting nearly 3 million users.
In the entertainment and technology nexus, Fansland, a music idol protocol, is set to revolutionize the music festival scene with a Web3 event in Bangkok. This event follows a successful $10 million funding round and could draw around 40,000 attendees. The festival will not only feature performances from various artists but will also utilize NFTs for ticketing and tokenized music products. Fansland’s event underscores Thailand’s emergence as a crypto-friendly hub, supported by a conducive regulatory environment and advanced infrastructure.
In an another development in the blockchain infrastructure sector, Chinese internet giant Tencent has inked a deal with Romania-based MultiverseX. Through this partnership, Tencent Cloud will provide essential blockchain infrastructure services, supporting a range of major blockchains like Ethereum, BNB Chain, and Solana. This collaboration marks a crucial step in enhancing blockchain application development without the need for extensive coding knowledge, positioning Tencent as a key player in the global blockchain ecosystem.
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Filed under: Bitcoin - @ April 22, 2024 2:16 pm