Analyst estimates a lower ETF attraction in the Hong Kong market

One distinction between the US and Hong Kong is that the latter has begun housing Ether ETF. It has yet to move forward with Spot Bitcoin ETF, something that industry leaders have mastered in three months. The analyst believes that Hong Kong does paint a brighter picture with a wider scope when looked at from an Asian lens, but the actual performance may be underlined by a lower value in AUM.

Eric Balchunas, a senior ETF analyst who hails from Bloomberg, has said that Hong Kong would be lucky if it succeeded in bagging $500 million in assets under management. It could have been easy to ignore if it were specifically for Spot Bitcoin ETF. Eric, however, has expanded his statement on a broader level by considering the collective umbrella of Bitcoin ETF and Ether ETF.

One reason his statement is attracting attention is that the US has gathered over $200 billion in trading volumes since January 2024. The market is led by the likes of BlackRock, Fidelity, and Grayscale; such big names are missing in Hong Kong, along with limited access to Chinese, per Balchunas. BlackRock and Fidelity, for example, had zero value but have now attracted $30 billion in new capital.

Many crypto enthusiasts in Asia believe that it is like throwing cold water into their excitement. Eric said through an official statement on X that the community should not expect a lot of flow, adding that the market in Hong Kong is tiny and like a child’s play when compared to the US.

Eric has also set the ground clear by saying that his statements should not be construed as bearish, adding that it only works well for Bitcoin as more investment avenues open up for the token. Hong Kong is less likely to match the level of the US because it has a less liquid and efficient atmosphere, with the possibility of wide spreads and premium discounts.

Hong Kong is expected to charge a sponsor fee in the range of 1%–2%, more than what BlackRock charges—0.25%. Spot Bitcoin ETFs in Hong Kong are expected to be introduced in April this year. If approved, it will be a fundamental shift in its approach to revive the landscape of global crypto investment.

The development comes at a time when Bitcoin and Ethereum are struggling to rise. Currently, BTC is trading at $63,429.67, a decrease of 4.40% over the past 24 hours. BTC has retraced its steps from the $70,000 that it achieved in recent days. ETH is near the $3,000 milestone. That is dangerous because a further fall will lead to a new low for Ether, away from the target of $4,000.

Hong Kong now has its sights set for April, with the possibility of bagging a Spot Bitcoin ETF for crypto enthusiasts.

Roxanne Williams

Roxanne Williams has recently joined as a market reporter for CryptoNewsZ - the 24/7 crypto news site, where she produces recent stories, technical analysis and price updates on world's leading cryptocurrencies.

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