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Bloomberg Analyst Forecasts Capital Inflows into Hong Kong ETFs

Bloomberg analyst Eric Balchunas has weighed in on the potential for spot cryptocurrency ETFs in Hong Kong, offering insights into the anticipated capital inflows into the region.

Balchunas has projected an initial asset estimate of $1 billion for the first two years of Hong Kong’s spot cryptocurrency ETFs. While acknowledging this as a positive development, he notes that it falls short of the $25 billion estimate cited by some analysts.

However, Balchunas emphasizes that the success of these ETFs hinges significantly on infrastructure improvements. He also highlights the potential for Hong Kong to emerge as a leading ETF hub in the Asian region as a result of this development.

Notably, Balchunas points out that mainland Chinese investors may face restrictions in purchasing Hong Kong-listed Bitcoin and Ethereum spot ETFs, as virtual asset acquisition is prohibited in the region.

The analyst further clarifies his earlier estimate of $500 million, stating that it was a short-term forecast. The revised estimate takes into account a longer timeframe for infrastructure development.

The approval of spot Bitcoin and Ethereum ETFs by Hong Kong’s Securities and Futures Commission (SFC) for firms like Boshi International, HashKey Capital, China Asset Management, and Harvest Investment underscores the region’s active efforts to regulate the crypto market. Hong Kong’s transparent legal environment has made it an attractive destination for crypto projects, establishing the region as a prominent crypto center within China’s special administrative framework.

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