Hong Kong Bitcoin & Ethereum ETF To Attract Only $1B AUM: Bloomberg Analyst

Bloomberg analyst Eric Balchunas, in collaboration with analyst Rebecca Sin, has adjusted estimates for the potential assets under management (AUM) of Bitcoin and Ethereum Exchange-traded Funds (ETFs) in Hong Kong. The AUM expectation for the Hong Kong Bitcoin and Ethereum ETFs has been lowered to $1 billion.

Hong Kong Bitcoin & Ethereum ETFs Might Face China’s Regulatory Scrutiny

Balchunas shared insights indicating that mainland China investors may not be eligible to purchase these ETFs due to restrictions on virtual asset investments. Consequently, the analysts have revised the AUM target down from $25 billion to $1 billion for the first two years.

Despite the lowered projection, Balchunas still considers the $1 billion estimate for the Hong Kong Bitcoin and Ethereum ETFs as healthy. However, he emphasized that it falls significantly short of the previously speculated $25 billion mark. In addition, he noted that the speed of attaining this revised target largely hinges on improvements in infrastructure.

Moreover, Balchunas also noted that although mainland China investors face restrictions, there are alternative routes available for investment. However, these methods utilize less utilized channels that could potentially face regulatory scrutiny.

Earlier, the analyst also noted that the inflows of Hong Kong Bitcoin and Ethereum ETFs would be lower than expected. The biggest restriction was the size of the Hong Kong crypto market being relatively smaller than that of the U.S. In addition, the restraints on the Mainland China investors adds to the challenges.

Also Read: Top Analyst Sees Bitcoin (BTC) Hitting $650K Amid Hong Kong’s Bet

Hong Kong SFC Offers Greenlight

Earlier, on Monday, April 14, the Hong Kong Securities and Futures Commission (SFC officially sanctioned the trading of Spot Bitcoin ETFs and Ethereum ETFs, marking a significant milestone. Moreover, Hong Kong now stands as the first jurisdiction to introduce a Spot Ethereum ETF, while similar discussions are underway with the US SEC.

Diverse 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 obtaining shares in these ETFs.

Also Read: Bitcoin ETF Outflows Cross $58 Million, GBTC Outflows Slow Down