ETFs in Hong Kong: Growing interest in bitcoin and potential infusion of Chinese investment

HashKey, a Hong Kong-based crypto exchange, is finalizing the infrastructure for spot bitcoin ETFs. Approval of the first bitcoin exchange-traded funds in Hong Kong is expected as early as April 15.
According to analysts, the launch of such funds, similar to U.S. ETFs, will attract significant investment in the crypto market, including investors from China.
Due to strict restrictions on cryptocurrency and mining operations in mainland China, asset managers cannot offer cryptocurrency ETFs to local clients. However, several cryptocurrency futures ETFs are already registered in Hong Kong, whose shares are traded through exchanges and brokerage platforms of major banks and openly advertised.
The HashKey exchange also announced a partnership with the TON Foundation, a community of developers in the TON ecosystem. According to the announcement, the exchange's infrastructure will be used to purchase cryptocurrency via Telegram's embedded crypto wallet for users in the Asia-Pacific region.
HashKey is one of two crypto exchanges with a license to trade cryptocurrency in Hong Kong. Bybit and MEXC exchanges, which were stripped of such a license, were deemed dubious by the local Securities and Futures Commission (SFC) in March.
The flow of Chinese investment could exceed the volumes attracted to the bitcoin market by U.S. exchange-traded ETFs.
In China, due to the withdrawal of investor funds from the gold sector and the crisis in the residential real estate sector, a surplus of investment money has accumulated. This has led to a growing interest in investing in other assets.
The biggest beneficiaries of Chinese investment over the past 17 years have been the US, Australia and the UK, as well as Brazil, Switzerland, Canada and Germany. China has also increased its investment in EU equities, exceeding more than €40 billion.
However, European regulations make investment for Chinese companies and private investors difficult.
Today, China ranks second in the world in nominal GDP and first in purchasing power parity; its share of the world economy is 18.45% (data as of September 1, 2023).
By 2030, China plans to overtake the US as the world's largest economy. The bitcoin market should expect a new influx of investment from private investors from China via Hong Kong bitcoin-ETFs.