Why Hong Kong Bitcoin ETFs Matter, According To 10x Research

Hong Kong’s recent approval of Bitcoin BTC/USD and Ether ETH/USD exchange-traded funds (ETFs) for trading is a significant development in the world of digital assets.

That’s according to a new research report by 10x Research, which highlights that the approved ETFs, managed by prominent firms such as China Asset Management and HashKey, are distinct for their inclusion of Ether and the use of in-kind redemptions.

These offer investors benefits like lower transaction costs and reduced risks compared to their US counterparts.

According to the report, Hong Kong’s decision is part of a broader strategy to position itself as a leading digital asset hub, with the success of these ETFs potentially hinging on the participation of mainland Chinese investors.

It suggests that Chinese investors may access these ETFs through the Southbound Connect program, providing a significant diversification opportunity amidst concerns about the Chinese property market and stock performance.

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The approval of these ETFs in Hong Kong aims to leverage Bitcoin as a hedge against potential renminbi devaluation and as a geopolitical tool.

The 10x Research report also indicates that other jurisdictions might follow Hong Kong’s lead in approving Bitcoin ETFs, driven by the ongoing global interest in regulated cryptocurrency products.

Despite China’s ban on certain Bitcoin activities, the approval of regulated products like Bitcoin and Ether ETFs indicates a nuanced stance towards virtual currencies, with potential implications for global Bitcoin demand and trading dynamics.

Following Hong Kong’s approval, 10x Research believes that the financial world will closely monitor the launch of these ETFs and the response from mainland Chinese investors for potential ripple effects on the cryptocurrency market in the Asia-Pacific region and beyond.

These topics are expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.

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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.