Hong Kong ETFs Could SHOCK The Markets!! Here’s Why!!

Hong Kong is the first in Asia Strengthen Hong Kong's position as etf's Marketplace launch of crypto ETF Hong Kong is kind of like a Sandbox the spot Bitcoin ETFs in the US fueled massive Rallies in BTC and the broader crypto Market this year that's why when Hong Kong approved its own spot Bitcoin and Ether ETFs in April expectations were Skyhigh but since their launch Hong Kong ETFs have underperformed with low volume And net outflows in their first few Weeks of trading this begs the question Of whether they'll pick up steam or Become just another flop like so many Crypto exchange traded products before Them today we find Out Hong Kong's crypto ETF launches were Supposed to Mark a high point in its Race against Dubai Singapore and other Crypto-friendly jurisdictions to become The world's digital asset Hub but it Hasn't always been smooth sailing for The crypto industry in Hong Kong which Is flip-flop between cracking down on And opening up to crypto trading if You're not familiar with Hong Kong's Recent history with crypto well you are In luck because we made a video breaking It down a while back we'll leave a link To it here so you can get the whole Picture but okay I know pausing and Watching a whole other video while Coming back is also a big ask when

You're enjoying this one so much so Let's recap Hong Kong population 7.2 Million it's a city state sitting on the Southern Seashore of China with a unique Constitutional Arrangement known as one Country two systems as the name suggests Hong Kong is a part of China but it Enjoys semi-autonomy with its own Distinct culture laws and government Structure this is why for example you Can occasionally see headlines coming Out of Hong Kong about protest movements Of a kind that wouldn't be tolerated on The mainland and this also explains why When Beijing began its crypto Crackdown During the 2017 2018 borun many of the Biggest players in China's crypto scene Hightailed it to Hong Kong for a while In the late 2010s Hong Kong was Welcoming to crypto in general and Well On its way to achieving the coveted Global Hub for digital asset status that Was until late 2020 when Hong Kong's Government banned retail crypto trading And began its own Crackdown on the Industry although institutions were Allowed to continue trading and Investing in crypto the damage was done And much of the industry was scared away Offshore the citystate remained more or Less anti- crypto until one day in October 2022 when it made a surprise Announcement that it was considering Legalizing retail crypto trading Hong

Kong may have a small population but There is a huge amount of wealth Concentrated there and more importantly It's technically a part of China so such A proposition is not to be sneezed at This announcement was particularly Surprising because at the time a new National Security Law was thought to Have ranged in Hong Kong's autonomy from China this led to speculation that if Hong Kong was flipping to become Pro Crypto then someone in Beijing must have Given it the green light and if that was The case maybe China wanted to use Hong Kong as a testing ground for policies That might later be introduced on the Mainland China was quick to pour cold Water on this saying that Hong Kong's Stance on crypto was purely of its own Volition but at the same time it was Reported that state-owned banks in China Were catering to crypto clients in Hong Kong and spec ation that China might yet Soften its stance on crypto continued Anyway on the 1st of June 2023 Hong Kong's new alleged crypto-friendly Regulations came into effect they raised A few eyebrows because not everyone in Crypto found them to be all that Friendly as soon as they came into Effect any crypto exchange not Registered with Hong Kong Securities and Future commission was considered an Illegal operation the problem was the

Sfc only began accepting applications From cryp to exchanges on the 1st of June the day the regulations came into Effect registration is expensive and Timec consuming as exchanges need Insurance independent assessment reports Regulated crypto custodians and they Need to track every single crypto Transaction through the financial action Task force Infamous travel rule clearly Then Hong Kong wasn't making life easy For exchanges this was in evidence when The sfc added a raft of products by The Bybit Exchange to its list of Suspicion Ious Investments it also warned Hong Kongers against using Mech C which lacks A license in Hong Kong then there was Bitette which decided not to apply for a License and instead withdrew from Hong Kong entirely just months after setting Up a branch there although the exchange Claimed that this was for and I quote Business and Market related Considerations as of last month there Were two licensed exchanges in Hong Kong Hash key and OSL there were also 24 Unlicensed exchanges buying for one of The sfcs prize licenses between them These exchanges are competing to serve a Market of around 8 million Hong kongers At the time of making this video hash Key's daily traded volume was around $100 million while there is no data Available about os's volume however it

Is worth pointing out that OSL has not Had a profitable year since 2019 and not Too long ago sold near 30% share of its Operation to bgx an unlicensed crypto Group that appear base in Singapore so It was no surprise when hash Lea Wang Told the financial times in April that He is not eager to see any more Exchanges winning licenses that would be Like a turkey voting for Christmas for All we know hashy might have cornered The licensed Hong Kong market more or Less alone but that makes it all the More interesting that hash key is Seeking to expand through its International unit and I quote in part Owing to fears that Hong Kong's Regulators restricted access to overseas Investors in hindsight the overheated Competition between exchanges fighting To win a license and serve a tiny Tightly regulated market generating Something around a $100 million in Traded volume per day can probably tell Us something about Hong Kong's ETFs Already and that is that there's an Outsized amount of Interest concentrated On unofficially sanctioned crypto Infrastructure that exists for a rather Small group of people by the way if You're enjoying the video so far make Sure to jab that like button so that More people can see it subscribe to the Channel and turn on the Bell

Notifications so that you never miss Another [Music] Upload get in [Music] Here take a seat Sir go on so tell me about these Anxieties you've been experiencing when Did they first manifest themselves well You know I I think they first started When I got into crypto I I started to Worry about all kinds of stuff such as Well I became anxious that I was Spending you know way too much on Exchange fees like every time I made a Trade boom more precious crypto gone and I I I I felt like I was missing out in Other ways too what other ways well for Instance why didn't I get a a a sign up Bonus when I registered on an exchange I Mean come on they they should be Welcoming me with open arms that's a Common feeling for many people in crypto Yeah go figure and I kept getting told To buy a hardware wallet to keep my Crypto safe but you know some of those Things ain't cheap huh I what's the guy To do well you know there's a cure for Those concerns you mean medication no I Mean like the coin Bureau deals page it Is trade and fee discounts on top crypto Exchanges it offers sign up bonuses of Up to $60,000 and it has discounts on the best

Hardware wallets too you mean I I just Go to the coin Bureau deals page and I'm Cured yeah absolutely just head down Using the link down below okay I'm on my [Music] [Applause] Way now in April this year Hong Kong was Back in headlines around the world after The Securities and future commission Appeared to Grant a swift approval of Applications for the spot Bitcoin and Ether ETFs from China AMC Harvest Global And Basera International the Applications were first reported in English language media on the 8th of April and by the 15th they had all been Granted approval by the s FC to begin Trading as early as the 30th of April However it is worth pointing out that it Was in December 2023 that the Hong Kong Monetary Authority and the sfc first Announced they would accept applications For spot crypto ETFs and release Requirements for the issuers to follow In other words Hong Kong ETFs weren't Built on a week but rather several Months now December to April might not Sound like a long time to anyone who Remembers the long wait for the US spot Bit coin ETFs but it seems there was Some grumbling that the process of Applications and approvals in Hong Kong Was actually taken too long for example As early as mid January the South China

Morning Post cited industry insiders Saying Hong Kong and I quote needs to Speed up approval to strengthen the City's competitiveness in the global Cryptocurrency market and the Hong Kong Had and I quote fallen behind the US in Authorizing spot cryptocurrency ETFs This is a really interesting take Because on the one hand it's certainly True that the US ETFs were approved long Before Hong Kong's but the road to Approval by the SEC was long and Extremely ardous meanwhile this article Citing industry insiders telling Hong Kong Regulators to hurry up with the Approval process was written not long After the sfc and the monetary Authority First announced they would accept Applications it makes you wonder just How fast they were expecting or if they Were projecting pure fomo because the US ETS had just launched at this time Anyway although Hong Kong may have been Later to the party than the US it did Seem that it Regulators did try to make The ETF approval process relatively Swift and painless and this Cooperative Stance from Regulators will have been Welcomed by the applicants who had to Jump through rather a lot of Hoops to Get their ETFs approved to find out what This means we can turn to a translation Of a local report by Hong Kong news Outlet 10cent Finance according to the

Report applying for a spot Bitcoin ETF In Hong Kong requires the cooperation of At least 20 separate institutions Including market makers and Bitcoin Custodians and institutions holding Virtual asset trading accounts Applicants also need independent Ros Meaning Hong Kong license responsible Persons who meet the local asset Management requirements it seems that Some of them didn't actually have Independent Ros leading to China AMC to Hurriedly poach anarrow from a small Bitcoin Futures Institution as you can See getting an ETF approval in Hong Kong Isn't exactly a walk in the park that's Why it's so remarkable that the Applications seem to have been approved So quickly according to 10cent finance Some of the ETF applications in Hong Kong have formed a temporary team some Time around early March and submitted Their applications in the second week of March reportedly AMC was super fast and Received approval in just under 2 weeks Meaning sometime in the second half of March notably this is well in advance of The approvals being officially announced On the 15th of April and this is Significant because as 10 said Finance Points out and I quote if Hong Kong's Application process and regular Communication channels are strictly Followed it is unlikely that any

Institution in Hong Kong can complete All application materials in about half A month as China AMC and harvest Global Are subsidiaries of financial Institutions on the China Mainland you Have to wonder just how this was all Accomplished so quickly we can't say if There were any shortcuts taken behind Closed doors but at the very least we Have to smize that Hong Kong Regulators Were extremely cooperative and for that Matter the spectacle of a monster Bitcoin rally fueled by tens of billions Of dollars of inflows into the US ETS Throughout q1 probably didn't hurt the Case for a swift approval of Hong Kong Regulators either at any rate it sounds Like the kind of regulatory environment The ETF issuers in the United States Can only dream of clear rules prompt Decisions cooperation instead of combat The industry regulated syy sounds almost Too good to be true anyway the sfc's Active cooperation and Swift processing Of the new ETFs came as another Indication that Hong Kong Regulators Don't want to fall behind the likes of Dubai and Singapore and a raft of other Jurisdictions vying to become the Leading Global Hub for digital assets With the ETFs approved and launched in The end of April Hong Kong became the First jurisdiction in East Asia to have Spot crypto ETFs as the launched

Approach optimistic predictions about The impact of Hong Kong's new ETFs on The price of BTC eath started appearing Some of these hinged on the in-kind Subscriptions and Redemption models of The Hong Kong ETFs which does Distinguish them from their us Equivalents which are in the incash only Under the in kind model investors can Buy into and take profits out of the ETF Products with crypto rather than them With cash naturally this is optional and Investors can also use the incash Subscription and Redemption instead Among the predictions circulating before The launch of the ETFs our favorite Soundbite came from tongle Han CEO of Harvest Global an issuer of one of the New ETFs and subsid of the Mainland Chinese asset management company Harvest Fund management Han told CNBC that in Addition to the trafi investors at whom ETFs are usually marketed Hong Kong's ETFs would also generate and I quote Huge demand from crypto natives who want To Stack SATs and eth rather than Fiat Based on this argument Han reasoned that The market size for Hong Kong ETFs is Double that of the United States Equivalence to his credit he did Correctly predict that the Hong Kong ETFs would get off to a slow start which He put down to investors being sidelined Before the inine settlement feature

Starts to show its strength in a Separate CNBC interview Thomas Sue head Of digital assets at China AMC made a Similar argument about the inine model However he also pointed out that China AMC's ETFs can be traded with not only Crypto USD and the Hong Kong dollar but Also the uan this will have done nothing To despell rumors that Hong Kong ETFs Would be a magnet for investors in Mainland China but we'll get back to That in just a moment according to CNBC China AMS was and I quote confident that The listing scale of Hong Kong's crypto ETFs can exceed $125 million although it Wasn't entirely clear if this was Inflows traded volume or assets under Management at any rate this sounds a Little more down toe than the prediction Made by tongle Han who made the Prediction about Hong Kong's Market size Being twice the size of the United States where the spot Bitcoin ETFs Generated $4.6 billion do in traded Volume on their first day alone but Within hours of the launch on the 30th Of April it became clear this prediction Wasn't down to earth enough in the first 12 hours of trading Hong Kong's ETFs Recorded just $6.3 million in traded Volume and by the end of the day all of The spot Bitcoin and E ETFs combined had Generated traded volume of just $1 Million this was a pitiful performance

By any measure and it seemed to catch The market off guard between the 30th of April and the 1st of May BDC plunged 12.6% from around 65,7 to almost $56,500 now between all Of the expect ations and disappointment For the new spot Bitcoin ETFs it was Easy to forget that Hong Kong also Launched the world's first spot etherum ETF unfortunately this also was a Disappointment as it accounted for just $2 million on the first day's trailer Volume of 11 million by the end of the First week the world's first spot eth ETF had $54 million in asset under Management not exactly a blockbuster Anyway in hindsight it's easy to point Out the Hong Kong's market for a spot Crypto ETF is not in fact twice the size Of the United States Market analyst Noel Aen demonstrated this point by pointing To the historic performance of the Crypto Futures ETF in the United States And Hong Kong Aon noted that one year After multiple BTC and eth future ETFs Were listed in Hong Kong their combined Asset under management was below 170 Million meanwhile the largest Bitcoin Future ETF listed in the United States Had more than two .8 billion in assets Under management on the 6th of May Bloomberg senior ETF analyst Eric Balunas chimed in advising his followers To I quote not expect big numbers from

Hong Kong based on the performance of The US ETFs which he said are and I Quote in A League of Their Own what's Interesting is that Eric argues that Hong Kong ETFs are and I quote already As big as their local market as the US Ones are to theirs he accompanies this Claim with what looks like like some Back of a napkin type Mass arguing that The $37 million in assets under Management reached by Hong Kong's new Spot ETFs in their first week would be The equivalent to $50 billion in asset Under management in the United States in Relative terms for reference Hong Kong's Equity sector has a total market cap of $4.5 trillion compared to the United States of $50 trillion this hints a Ratio of a little under 1 to10 which Suggests that a $37 million in Hong Kong's Market would be closer to $3 Billion than 50 billion in the US or Maybe ah napkin math is wrong anyway at Any rate Eric bonus's optimistic take Was a fresh one now at the time of Making this video it's been almost a Month since Hong Kong's new ETFs started Trading if they're going to pick up Steam it doesn't look like it will Happen anytime soon recently many of the ETFs are registering zero daily lows Which suggests either incredibly tight Battles between balls and Bears or Extremely low trade volume or perhaps

Both when the flows are flowing it looks Like there is rather a lot more sell Pressure than buy pressure at the moment The cumulative total flows of all of the New spot BTC and eth ETFs in Hong Kong Amount to about $19 million in net Outflows it's not much to write and home About anyway aside from the small size Of H Kong's market and the outside Expectations set by the ETFs in the United States analysts have pointed the Finger at the fragility of the market Sentiment of late this is because Despite the recent rallies in stocks and Bitcoin weaknesses in China's own Economic recovery has invested uneasy This makes sense but we can think of Another driver of the net outflows seen So far on the 13th of May these ETFs saw Just under $40 million in net outflows On what was by far the most active day Of trading to date now what else Happened on the 1th of May well it might Be a coincidence but on that day the Stock exchange of Hong Kong confirmed to Coindesk that Hong Kong's crypto ETFs Aren't available to investors in Mainland China coindesk report to this Effect appears to have been the final Nail in the coffin of that particular Rumor previously it had been suggested That the Shanghai Hong Kong stock Connect which enables Mainland trading Of Hong Kong stocks would funnel

Billions of dollar of Mainland money Into the ETFs unfortunately this is Simply not true the ETFs were never Available to investors in mainland China It's fascinating that it took two weeks Of the ETFs being launched and Unavailable to Mainland investors for The market to really react to this Predicament it seems that the rumor may Have been spread by an extremely lazy Reading of a rule which allows M Investors to access the ETFs if they Have Hong Kong residency and are in Hong Kong so like Hong kongers well go figure That was a very good reason that Mainland investors who don't have a Hong Kong residency aren't allowed access to The ETFs as coindesk points out this Would and I quote fly in the face of Beijing's monetary policy of controlling The ascent and Descent of the Yuan so The exports can remain competitively Priced in global markets and and I quote Allowing a Trader to purchase shares of A crypto ETF in Yan via a local Brokerage account and then sell it for Crypto would institutionalize Capital Flight adding a significant number of Zeros behind the amounts being converted To crypto to leave the country well There you have it China is probably not Going to rip such a big hole in its own Monetary policy on purpose anytime soon So all of this bags the question what is

The significance of the Hong Kong ETFs On the crypto Market as we pointed out Earlier the the lukewarm launch of the Hong Kong ETFs coincided with a dump in The crypto Market no doubt many crypto Investors and Traders caught wind of the Underwhelming numbers coming out of Hong Kong's launch date and decided to sell But the relationship between Hong Kong ETFs and btc's recent price action Likely goes both ways bitcoin's price Was topped out in q1 at around $ 73,74 on the 14th of March it then began A medium-term downtrend that was punctu Ated by what looks like something of a Double top on the 8th of April at $72,800 the 8th of April was the same Day that the English language media First started reporting that Hong Kong's CFC have received a raft of ETF Applications BTC then spent the next 5 Weeks continuing a period of choppy Downwards with a bottom of $ 56560 on the 1st of May 24 hours after The ETF in Hong Kong launched a Ted Recession ception so on one hand it is True that the new ETFs launched at a Time when BTC was already in a downtrend This means that the ETFs are certainly Not responsible for the medium-term Bearish price action which began in March at the same time the bottom of the Recent choppy downward on the 1st of May Coincided with the lackluster launch of

The ETFs the day before now let's look At the 13th of May the dark day when the Hong Kong ETF Traders appeared to notice That Mainland Chinese investors can Access the ETFs resulting in net Outflows of $40 million this was the Worst day for Hong Kong ETFs by a very Long way but when it comes to bitcoin $40 million of selling pressure is but a Drop in the ocean you can see it on the BTC chart it was up 2.37% on the daily on the 13th of May Not exactly giving grayscale outflow Vibes Is It Anyway until Hong Kong ETFs Receive a huge influx of Interest it Seems that the most drastic outflows and For the matter inflows are just not big Enough to have a more symbolic impact on The markets sentiment rather than actual Cell pressure seems to be the more Powerful force here this may Remain the Case until the day that Chinese Mainland Investors can access them although Satoshi knows that if this will ever Happen so perhaps the question on our Lip should be less when Hong Kong pump As when China ate and that Frank frankly Is a mystery so you'll have to stay Tuned subscribed and attentive to your Coin Bureau Bell notifications to keep Up with the latest from China's will They won't their relationship with Crypto right that is all for today folks If you think we are underrating the

Significance of the Hong Kong ETFs feel Free to roast Us in the comments but be Nice while you're all at it go on and Uppercut that like button so more people Can join our conversation as always Thank you so much for watching and I'll See you next time this is Jessica over And out [Music]


Coinbase is a popular cryptocurrency exchange. It makes it easy to buy, sell, and exchange cryptocurrencies like Bitcoin. Coinbase also has a brokerage service that makes it easy to buy Bitcoin as easily as buying stocks through an online broker. However, Coinbase can be expensive due to the fees it charges and its poor customer service.

Leave a Comment

    • bitcoinBitcoin (BTC) $ 66,519.00 0.47%
    • ethereumEthereum (ETH) $ 3,594.90 0.89%
    • tetherTether (USDT) $ 0.999004 0.07%
    • bnbBNB (BNB) $ 608.44 0.35%
    • solanaSolana (SOL) $ 148.32 2.15%
    • staked-etherLido Staked Ether (STETH) $ 3,594.77 0.92%
    • usd-coinUSDC (USDC) $ 0.999472 0.05%
    • xrpXRP (XRP) $ 0.488666 0.61%
    • dogecoinDogecoin (DOGE) $ 0.136296 0.13%
    • the-open-networkToncoin (TON) $ 8.01 0.08%