Renowned Bloomberg ETF expert Eric Balchunas recently shared his thoughts on Hong Kong’s conditional approval of the first spot Ether ETF and Bitcoin ETFs. Interestingly, Hong Kong is becoming the first city in Asia to accept these cryptocurrencies as legitimate investment tools.
He brought up the point that, in comparison to nations like the US, the Hong Kong ETF market is quite tiny. The products are not officially accessible to Chinese retail investors through these ETFs. According to Balchunas, these three potential ETF issuers paled in comparison to massive asset management firms like BlackRock.
“Don’t expect a lot of flows — I saw one estimate of $25b that’s insane. We think they’ll be lucky to get $500m.”
In this statement, Balchunas expressed doubts about the potential inflows into these ETFs. He questioned the feasibility of the $25 billion figure, terming it as “exaggerated”.
Balchunas also pointed out that costs would probably be in the range of one to two percent and that the capital environment for these funds was less efficient than in other locations. “The underlying ecosystem there is less efficient, which likely results in wide spreads and premium discounts for these ETFs,” he stated.
The Bloomberg ETF Discusses The Impact Of Bosera And HashKey Capital-
Bosera Asset Management (International) and Hong Kong HashKey Capital will be releasing their product together. An “in-kind” subscription mechanism will be incorporated into the virtual asset spot ETFs in Hong Kong, allowing investors to immediately purchase ETF shares with Bitcoin or Ether.
Balchunas has emphasized the novel aspect of this strategy and its capacity to draw in a wide spectrum of investors and encourage additional expansion of the cryptocurrency industry in the area.
Does Hong Kong Aim To Emerge As A Regional Digital Asset Hub?
Despite these reservations, Balchunas acknowledged the importance of Hong Kong’s move toward allowing in-kind creations and redemptions for spot Bitcoin ETFs. This decision may distinguish Hong Kong from the United States, where such transactions are strictly cash-based.
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I don’t think the title of your article matches the content lol. Just kidding, mainly because I had some doubts after reading the article.