- Hong Kong has been considered to allow crypto ETFs.
- The prices of both BTC and ETH remained stable.
ETFs have been a key factor in the recent positive turn of events for crypto. Initially, the focus was only on the progress of the ETF regulation in the US. However, the interest in ETFs is now being observed in other parts of the world as well.
The ETF craze rises
Recently, Hong Kong has been pondering the allowance of ETFs that directly invest in crypto. Officials will aim to establish an Asia-Pacific digital asset hub and address the fallout of the JPEX scandal.
The city is also exploring the possibility of retail investors accessing these spot ETFs, but only if regulatory concerns are addressed. They are open to innovative technology that enhances efficiency and customer experience.
The crypto industry sees ETFs as a way to make digital assets more mainstream and accessible to a range of investors.
Currently, both Hong Kong and the US allow futures-based crypto ETFs, but they have not seen significant adoption compared to the overall size of the fund industry. Hong Kong’s new virtual asset regulations seek to lure companies while prioritizing investor protection. It highlights the need for robust regulation.
The SFC’s digital asset regime allows retail investors to trade major tokens on licensed exchanges. The regulator is exploring tokenization, creating digital representations of real-world assets.
In addition, security token restrictions for investors were removed, to allow tokenized securities to become more accessible.
Hong Kong’s central bank is considering guiding banks on digital asset custodial services, which is crucial for digital asset development. Experts estimated that by 2030, the market for these securities and funds could reach $5 trillion.
Potential impacts
Several players worldwide are competing to establish digital asset hubs. The potential approval of crypto ETFs in Hong Kong can boost sentiment in the crypto sector.
ETFs are considered a more accessible way for a broader range of investors to enter the market. If retail investors can access spot ETFs, it could increase interest and adoption of cryptocurrencies, making them more mainstream.
It showed that regulators and authorities are embracing digital assets. This could lead to increased confidence among investors.
Moreover, removing security token red tape for professional investors promotes further inclusivity in the market, potentially boosting overall sentiment.
Additionally, increased adoption of crypto ETFs can result in higher trading volumes and more capital flowing into the market, boosting liquidity.
State of the blue chips
The growing interest in ETFs can aid blue chip coins such as Bitcoin [BTC] and Ethereum [ETH] the most. The first round of hype around Bitcoin ETFs aided the coin to push past the $34,000 level. At press time, BTC was trading at $34,904.52, having declined by 0.55%.
Read Bitcoin’s [BTC] Price Prediction 2023-2024
The Velocity at which BTC was moving had fallen, showing a decline in the number of BTC trades.
Coming to ETH, it was trading at $1,879.13 at press time. Over the last 24 hours, its price fell by 0.26%. Its Velocity, just like BTC, also fell during the period.
Source: Santiment