According to Arthur Hayes, the former CEO of BitMEX, China could be closely monitoring how the United States navigates the spot Bitcoin Exchange-Traded Fund (ETF) pressure through its “proxy asset manager,” Hong Kong.
Taking to X on November 6, Hayes, who is not new to controversy, said competition is, after all, “amazing.” Should there be an economic war between the two economic powerhouses, the founder added, then Bitcoin, the world’s largest cryptocurrency by market cap, will benefit.
Is Hong Kong Watching The United States?
Hayers was responding to a news report shared widely on X suggesting that Hong Kong could be mulling approving spot crypto ETFs as part of their quest to be an Asia central hub. Still, as it is, it is not immediately clear which coin the Securities and Futures Commission (SFC) will eventually allow the trading of its complex derivatives, including an ETF.
Even so, considering the angle taken by Hayes, should the Hong Kong regulator ape the Securities and Exchange Commission (SEC), a spot Bitcoin ETF would be the first product available for retail or institutional trading.
As of early November 2023, the SEC has yet to approve any of the multiple spot Bitcoin ETF applications filed by leading Wall Street giants, including Fidelity and BlackRock. According to Hayes, BlackRock acts as the United States “proxy asset manager,” playing a similar role as Hong Kong is to China in the former CEO’s speculation.
Hong Kong is an administrative region of China. Since the region is under China’s administration, policy implementation regarding crypto can be used as a barometer of how the country perceives digital assets. In mainland China, crypto trading and mining remain banned.
When Bitcoin ETF? Will BTC Price Fly?
According to a November 5 report, SFC CEO Julia Leung said if regulatory concerns are addressed, Hong Kong might consider permitting retail investors to access spot ETFs linked to cryptocurrencies like Bitcoin.
Potential moves by Hong Kong to introduce spot crypto ETFs coincide with efforts by at least a dozen American investment firms to introduce comparable products in the United States despite persistent opposition from the SEC.
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For now, it remains to be seen whether the approval of the first spot Bitcoin ETF in the United States will open the door for more of the same products in other zones, including Hong Kong. News of a possible spot Bitcoin ETF in the world’s leading economy has catalyzed demand, thrusting BTC to new 2023 highs.
Feature image from Canva, chart from TradingView