The long-awaited launch of Hong Kong’s first spot Bitcoin Exchange-Traded Fund (ETF) has sparked excitement among investors, reigniting speculation of an imminent Bitcoin boom in the region.
With an Initial Offering Period (IOP) scale of HK$950 million (approximately US$121 million), the ChinaAMC HongKong Bitcoin ETF has garnered significant attention, dwarfing the HK$160 million (US$20.4 million) raised by its Ethereum counterpart. This milestone event has investors eagerly anticipating a Bitcoin boom, a potential surge in cryptocurrency adoption and investment across Hong Kong and neighboring regions.
According to John Reade, Chief Market Strategist at the World Gold Council, this frenzy could signal a potential power shift in the precious metals market.
“Emerging markets have been the biggest end consumers for decades, but they haven’t been able to exert pricing power because of fast money in the west. Now, we are getting to the stage where speculative money in emerging markets can exert pricing power,”
China’s Growing Crypto Appetite
Samson Mow, a prominent figure in the crypto space, said, “This is the start of something big. Bitcoin is the only investable asset for China now, and the doors are open. Be patient, and you’ll see.” These sentiments echo the growing interest in cryptocurrencies among Chinese investors seeking alternative investment opportunities amid global economic uncertainties.
Data from the Shanghai Futures Exchange (SHFE) reveals a significant surge in long gold positions held by futures traders, reaching 295,233 contracts (equivalent to 295 tonnes of gold) as of late April. This represents a staggering 50% increase since September 2022, indicating a growing appetite for alternative assets among Chinese investors.
As of now, Bitcoin is trading at $60,918.70, experiencing a slight decline of 3.12% over the past day. Despite this dip, the market cap remains strong at approximately $1.199 trillion, with a trading volume over the past 24 hours at around $31 billion. This pricing information is crucial for investors tracking Bitcoin’s performance relative to the launch of ETFs in Hong Kong.
Is Bitcoin Poised for a Bull Run in Hong Kong?
Several key indicators point to a potential Bitcoin bull run in Hong Kong. Since early April, the MVRV (Market Value to Realized Value) ratio, a critical gauge of Bitcoin’s valuation, has steadily declined. As of April 26, this ratio stood at 2.21, suggesting that Bitcoin might be undervalued relative to its fair value.
Additionally, on April 24, the OI-weighted funding rate, which tracks market sentiment, shifted into positive territory. This shift reflects increasing interest in long Bitcoin positions and could signal a broader change from bearish to bullish sentiment. These developments are fueling investor optimism, with some experts seeing an attractive entry point for Bitcoin investments.
Hong Kong’s successful launch of a Bitcoin ETF could further accelerate adoption and investment in the region. With China’s increasing appetite for alternative assets and signals pointing toward an undervalued Bitcoin, investors are watching closely. These developments could have far-reaching impacts on the future of digital currencies throughout Asia and globally.
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