In a significant development for the Bitcoin (BTC) market, Hong Kong is poised to witness the commencement of trading for several spot Bitcoin ETFs on April 30th.
This milestone follows the successful approval and subsequent trading of Bitcoin ETFs in the United States earlier this year under the regulatory purview of the Securities and Exchange Commission (SEC).
With institutional adoption on the rise and Bitcoin reaching its all-time high of $73,700 in March, the forthcoming launch of these ETFs in Hong Kong holds great promise for the cryptocurrency market.
Fee Battle Looms
The Hong Kong Securities and Futures Commission (SFC) made a noteworthy announcement on April 15th, approving multiple Spot Bitcoin and Ethereum ETFs for trading. This regulatory approval has paved the way for the trading of Bitcoin ETFs in Hong Kong.
Industry experts Eric Balchunas and James Seyffart from Bloomberg anticipate an ensuing fee war as the ETF issuers strive to attract the largest number of clients.
Balchunas and Seyffart predict a potential fee war in Hong Kong as the Bitcoin ETFs prepare for launch. Harvest Fund, for instance, plans to enter the market with a full fee waiver and the lowest fee of 0.3% following the waiver period.
As seen in the chart above, three major players in the market, ChinaAMC, Harvest Fund, and Bosera, are identified with fees ranging from 0.99% to 0.3% (post-waiver) and 0.60%, respectively, all accompanied by cash redemptions.
Revised Bitcoin ETFs Projections
The competitive fee structures of these Bitcoin ETFs are expected to generate increased interest among investors, potentially attracting higher assets under management.
Balchunas acknowledges the relatively lower fee levels, describing them as a positive sign for the market. Lower fees are likely to enhance the appeal of these index funds and drive up their assets under management (AuM).
While optimism surrounds the launch of Bitcoin ETFs in Hong Kong, Eric Balchunas offers a cautious analysis of potential inflows into this new market.
Blachunas suggests that these ETFs may lag behind their US counterparts, which have already achieved a trading volume exceeding $200 billion since their launch in January.
Balchunas has revised his initial forecast, estimating that these Hong Kong ETFs could attract up to $1 billion in assets under management within the first two years of operation, doubling his previous projection of $500 million.
At the time of writing, the price of BTC stands at $66,000, reflecting a 1% decline over the past 24 hours and a nearly 3% decrease over the past fourteen days.
Despite this recent trend, the imminent launch of ETFs in the Hong Kong market can significantly impact BTC’s price, potentially propelling it to higher levels and even retesting its current all-time high zone.
Featured image from Shutterstock, chart from TradingView.com