Several Bitcoin and Ethereum spot ETFs that have been applied for by various institutions in Hong Kong have received provisional approval from the Hong Kong Securities and Futures Commission today. Many media outlets consider this news to be a significant positive for the cryptocurrency market. However, Eric Balchunas, an ETF analyst at Bloomberg, believes that the estimated inflow of funds for the Hong Kong spot Bitcoin ETF may be only $500 million, which is less than 1/25th of the size of the US Bitcoin spot ETF market.
The specific reasons are as follows:
1. The Hong Kong ETF market is smaller, with only $50 billion.
2. The approved issuers (Bosera, CSOP, and ChinaAMC) are smaller in scale and not on the level of large institutions like BlackRock.
3. The liquidity and efficiency of the underlying ecosystem (such as Hong Kong exchanges and service providers) are lower, which can lead to larger spreads for the ETF.
4. The transaction costs may be between 1-2%, much higher than most Bitcoin spot ETFs in the US.
In addition, Molly, who previously served as the Head of Market at Hashkey Hub, also commented that
