Bitcoin To $100,000: Can Hong Kong’s Spot ETFs Make It Happen?
2024年4月11日 - 4:30PM
NEWSBTC
In a recent analysis, Stanislas Bernard, the founder of Sinz
21st.Capital, delved into the complexities surrounding Hong Kong’s
consideration to approve spot Bitcoin ETFs against the backdrop of
China’s escalating economic crisis. With the nation grappling with
a record debt-to-GDP ratio of 288% in 2023, and witnessing one of
the most severe housing market collapses in three decades, the
financial instability has triggered an unprecedented capital flight
towards overseas markets. The Perfect Timing For A Spot Bitcoin
ETF? Amidst these turbulent economic times, Hong Kong’s potential
approval of spot Bitcoin ETFs stands out as a pivotal development
that could not only be a safe haven for Chinese investors but also
significantly influence Bitcoin’s valuation, potentially
catapulting it to the elusive $100,000 mark. China’s economic woes
have been intensifying, marked by a towering debt ratio and a
plummeting housing sector that has investors scrambling for
alternatives. “China currently faces a significant economic
downturn, exacerbated by soaring debt and malinvestments in real
estate. The crisis, becoming well-known in 2021 with the default of
Evergrande Group, has now spread, causing a ripple effect that will
likely slow down the Chinese economy for years to come,” Bernard
pointed out. Related Reading: Bitcoin Stays Sub $70,000 As Hong
Kong Readies April-End ETF Launch This backdrop of economic
instability has incited a significant shift in investor behavior,
notably among Chinese investors who, faced with stringent capital
controls, have sought refuge in ETFs that offer exposure to foreign
markets. Yet, this avenue has been fraught with its own challenges.
“Investors are paying premiums as high as 43% on certain US-focused
ETFs due to quota limitations, which speaks volumes about the
desperation to find safer investment harbors,” Bernard notes. Such
premiums underscore the pervasive fear and uncertainty that have
gripped the Chinese market, driving investors towards seemingly any
available exit from the volatility of the domestic market. The Role
Of Hong Kong Bernard believes that not only Hong Kongers but also
Chinese mainlanders will flock to Bitcoin ETFs. “They are pretty
integrated. Mainland is HK’s largest trading partner. Would not be
possible to approve a spot ETF and then close it to mainland. They
will enforce transaction limits instead,” the expert said. In the
midst of these developments, Hong Kong’ Securities and Futures
Commission (SFC) is reportedly considering the approval of spot
Bitcoin ETFs already by the end of April, as reported yesterday.
This move is viewed as a strategic effort to capture a portion of
the capital flowing into Bitcoin, especially in the wake of the
SEC’s approval of similar ETFs in the US, which saw a meteoric rise
with $12 billion of net flow. Related Reading: Bitcoin 2 Months
Through “Euphoria Wave,” How Long Was The Last One? “Hong Kong is
scrambling for a change. The approval of spot Bitcoin ETFs could
unlock a vast reservoir of stranded Chinese capital into Bitcoin,
providing a much-needed life raft for investors,” Bernard
explained. The anticipated approval of spot Bitcoin ETFs by Hong
Kong authorities has been met with significant enthusiasm within
the crypto community. Influential figures such as Bitcoin Munger
and Stack Hodler have been vocal about the potential impact of this
development on Bitcoin’s price. “Hong Kong ETFs approval have
accelerated to next week. Most accounts on CT weren’t making a big
deal about them, but they are a big deal. They are going to take us
to $100k+ in due time. Tick tock!” stated popular Bitcoin analyst
Bitcoin Munger (@bitcoinmunger). He refers to the regional yearly
year-over-year supply change from West to East. Stack Hodler
(@stackhodler) further emphasized the urgency among Chinese
investors to find secure investment avenues outside the traditional
system, “Chinese investors were panic-buying a Gold fund at a 30%
premium this month as they attempt to get their wealth into
something outside the Chinese system. The approval of Hong Kong
spot ETFs could be the turning point, offering a sanctioned avenue
for wealth preservation amidst the crumbling real estate market.”
Overall, the potential approval of spot Bitcoin ETFs in Hong Kong
is poised to be a landmark development, not just for the region but
for the global market. By offering a secure and regulated channel
for investment, it could serve as a catalyst for significant
capital inflow into Bitcoin, reinforcing its status as a viable
store of value. “As we stand at the cusp of this historic
development, the implications for Bitcoin and the broader
cryptocurrency market could be profound. The approval of spot
Bitcoin ETFs in Hong Kong could indeed be the harbinger of a new
era, potentially driving Bitcoin’s value to new heights,” concluded
Bernard. At press time, BTC traded at $70,945. Featured image
created with DALL·E, chart from TradingView.com
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