China ‘does not want to miss out’: Community reacts to HK spot Bitcoin ETF news
The cryptocurrency community is excited about the Hong Kong government reportedly weighing the launch of a spot cryptocurrency exchange-traded fund (ETF) amid the ongoing regulatory pushback against such products in the United States.
Hong Kong’s potential entrance into spot crypto ETFs could be a significant development in the context of the economic confrontation between the U.S. and China, BitMEX co-founder Arthur Hayes believes.
Hayes took to X (formerly Twitter) on Nov. 6 to express excitement over competition between the two economies, emphasizing that this competition will eventually be good for Bitcoin (BTC).
“Competition is amazing. If the U.S. has its proxy asset manager, BlackRock, launching an ETF, China needs its proxy asset manager to launch one, too,” he wrote.
Competition is amazing. If the US has its proxy asset mngr, BlackRock, launching an ETF, China needs its proxy asset mngr to launch one too.
The US v China economic war is great for $BTC. pic.twitter.com/ok7xipN4M5
— Arthur Hayes (@CryptoHayes) November 6, 2023
Cryptocurrency brand Coin Bureau was also quick to react to the potential spot crypto ETF launch in Hong Kong. According to the Coin Bureau, the U.S. Securities and Exchange Commission (SEC) might be getting some pressure amid other jurisdictions like Hong Kong jumping on the bandwagon of a spot Bitcoin ETF.
“It’s a cursory tale to the SEC that if they continue to stifle capital market innovation in the United States, other countries are going to fill the void,” Coin Bureau wrote on X.
Crypto influencer Lark Davis also stressed that the latest spot crypto ETF news from Hong Kong shows that the Chinese government doesn’t want to miss out on crypto opportunities.
“Hong Kong going to get spot Bitcoin ETFs now! Chinese money does not want miss out,” Davis stated.
Hong Kong is considering allowing retail investors to access spot ETFs linked to cryptocurrencies like Bitcoin, providing regulatory concerns are met, Securities and Futures Commission CEO Julia Leung said, according to a Bloomberg report on Nov. 5. The SFC did not immediately respond to Cointelegraph’s request for comment.
Hong Kong’s potential move into spot Bitcoin ETFs comes as at least a dozen investment firms in the U.S. seek to launch similar products in the country despite long-running pushback from the Securities and Exchange Commission (SEC).
Although both Hong Kong and the U.S. have permitted crypto ETFs linked to futures contracts, the jurisdictions are yet to approve a spot crypto ETF. Unlike a futures Bitcoin ETF, which tracks futures contracts to replicate BTC prices, a spot Bitcoin ETF directly holds BTC, allowing investors to gain exposure to the asset.
Related: Spot Bitcoin ETF hype reignited zest for blockchain games: Yat Siu
The U.S. was the first to launch futures-linked crypto ETFs in 2021, with Hong Kong following in its footsteps in late 2022 with the launch of CSOP cryptocurrency futures products. Combined with the Samsung Bitcoin Futures Active ETF, Hong Kong has about $65 million in crypto ETF assets, according to Bloomberg. The futures crypto ETFs have seen low demand in Hong Kong, with their share still being tiny compared to other global crypto funds.
Hong Kong and Shanghai Banking Corporation — the biggest bank in Hong Kong — reportedly enabled its customers to buy and sell Bitcoin and Ether (ETH)-based ETFs in June 2023.
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Making Britain better off will be “at the forefront of the chancellor’s mind” during her visit to China, the Treasury has said amid controversy over the trip.
Rachel Reeves flew out on Friday after ignoring calls from opposition parties to cancel the long-planned venture because of market turmoil at home.
The past week has seen a drop in the pound and an increase in government borrowing costs, which has fuelled speculation of more spending cuts or tax rises.
The Tories have accused the chancellor of having “fled to China” rather than explain how she will fix the UK’s flatlining economy, while the Liberal Democrats say she should stay in Britain and announce a “plan B” to address market volatility.
However, Ms Reeves has rejected calls to cancel the visit, writing in The Times on Friday night that choosing not to engage with China is “no choice at all”.
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The chancellor will be accompanied by Bank of England governor Andrew Bailey and other senior executives.
She will meet with her counterpart, Vice Premier He Lifeng, in Beijing on Saturday to discuss financial services, trade and investment.
She will also “raise difficult issues”, including Chinese firms supporting Russia’s invasion of Ukraine and concerns over constraints on rights and freedoms in Hong Kong, the Treasury said.
But it did not mention whether Ms Reeves would raise the treatment of the Uyghur community, which Downing Street said Foreign Secretary David Lammy would do during his visit last year.
Britain’s Foreign Secretary David Lammy and Chinese Foreign Minister Wang Yi in Beijing. Pic: AP
On Friday, Culture Secretary Lisa Nandy defended the trip, telling Sky News that the climbing cost of government borrowing was a “global trend” that had affected many countries, “most notably the United States”.
“We are still on track to be the fastest growing economy, according to the OECD [Organisation for Economic Co-operation and Development] in Europe,” she told Anna Jones on Sky News Breakfast.
“China is the second-largest economy, and what China does has the biggest impact on people from Stockton to Sunderland, right across the UK, and it’s absolutely essential that we have a relationship with them.”
Read more – Ed Conway analysis: The chancellor’s gamble with China
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Nandy defends Reeves’ trip to China
However, former prime minister Boris Johnson said Ms Reeves had “been rumbled” and said she should “make her way to HR and collect her P45 – or stay in China”.
While in the country’s capital, Ms Reeves will also visit British bike brand Brompton’s flagship store, which relies heavily on exports to China, before heading to Shanghai for talks with representatives across British and Chinese businesses.
It is the first UK-China Economic and Financial Dialogue (EFD) since 2019, building on the Labour government’s plan for a “pragmatic” policy with the world’s second-largest economy.
Sir Keir Starmer was the first British prime minister to meet with China’s President Xi Jinping in six years at the G20 summit in Brazil last autumn.
Relations between the UK and China have become strained over the last decade as the Conservative government spoke out against human rights abuses and concerns grew over national security risks.
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How much do we trade with China?
Navigating this has proved tricky given China is the UK’s fourth largest single trading partner, with a trade relationship worth almost £113bn and exports to China supporting over 455,000 jobs in the UK in 2020, according to the government.
During the Tories’ 14 years in office, the approach varied dramatically from the “golden era” under David Cameron to hawkish aggression under Liz Truss, while Rishi Sunak vowed to be “robust” but resisted pressure from his own party to brand China a threat.
The Treasury said a stable relationship with China would support economic growth and that “making working people across Britain secure and better off is at the forefront of the chancellor’s mind”.
Ahead of her visit, Ms Reeves said: “By finding common ground on trade and investment, while being candid about our differences and upholding national security as the first duty of this government, we can build a long-term economic relationship with China that works in the national interest.”
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