Bloomberg Analyst: Hong Kong Bitcoin and Ethereum ETF Will Earn Only 1 AUM
Bloomberg analyst Eric Balchunas, in collaboration with analyst Rebecca Sin, adjusted estimates for potential assets under management (AUM) for Bitcoin and Ethereum Exchange Traded Funds (ETFs) in Hong Kong. AUM expectation for Hong Kong Bitcoin and Ethereum ETFs lowered to $1 billion.
Hong Kong Bitcoin and Ethereum ETFs May Face Regulatory Scrutiny from China
Balchunas shared his insights stating that investors in mainland China may not be eligible to purchase these ETFs due to restrictions on virtual asset investments. As a result, analysts lowered the AUM target from $25 billion to $1 billion for the first two years.
Despite the lowered estimate, Balchunas thinks the $1 billion estimate for Hong Kong Bitcoin and Ethereum ETFs is still healthy. However, he emphasizes that this is significantly below the previously estimated $25 billion figure. He also noted that the speed of achieving this revised target largely depends on improvements in infrastructure.
Balchunas also noted that although investors in mainland China face restrictions, alternative routes for investment are available. However, these methods utilize fewer available channels, which could potentially face regulatory scrutiny.
Previously, the analyst also noted that inflows into the Hong Kong Bitcoin and Ethereum ETFs would be lower than expected. The biggest limitation was that the size of the Hong Kong crypto market was relatively smaller than the US. Additionally, restrictions on Mainland Chinese investors also add to the difficulties.
Hong Kong SFC Offers Green Light
Previously, on Monday, April 14, the Hong Kong Securities and Futures Commission (SFC) marked an important milestone by officially approving the trading of Spot Bitcoin ETFs and Ethereum ETFs. Additionally, Hong Kong is now offering Spot Ethereum ETFs. Similar discussions are ongoing with the US SEC.
Various financial institutions such as China Asset Management, Bosera Capital and HashKey Capital Limited have received the green light from the Hong Kong SFC to launch Bitcoin and Ethereum ETFs. This breakthrough empowers investors to invest in Bitcoin and Ethereum by purchasing shares in these ETFs.
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