Bitcoin and Ethereum ETFs in Hong Kong a harbinger for all of China?

China has been implementing a ban on cryptocurrencies since 2021. That’s why the start of trading in Bitcoin and Ethereum ETFs in the Hong Kong special zone made headlines. Will mainland China now reconsider its position?

Bitcoin and Ethereum ETFs have been traded on the Hong Kong Stock Exchange since the end of April

This follows developments in the USA, where Bitcoin ETFs have been causing a sensation since their launch in January. But Hong Kong, as a special zone in China, is a special trading center, because in 2021 Beijing announced a general ban on crypto and is at least partially implementing it. At the Bitcoin Asia conference in Hong Kong, much of the discussion revolved around future prospects for crypto across China, as the South China Morning Post reports.

The Bitcoin conference in Hong Kong attracted around 5,500 participants and the organizers estimate that around half came from mainland China. Chief organizer David Bailey said the Bitcoin ETFs in Hong Kong were an indication of a tactical rethink in Beijing. Hong Kong certainly would not have launched Bitcoin and Ethereum ETFs without the knowledge and consent of Beijing. According to the report, other conference participants were also optimistic that China wanted to reopen Hong Kong to the crypto industry. A first step, for example, could be that mainland Chinese are also allowed to invest in Bitcoin ETFs in Hong Kong.

It is unclear to what extent the crypto ban is being followed in China. Bitcoin miners remained active even after the ban, and the Wall Street Journal estimated in August 2023 that the world’s largest crypto exchange Binance continued to generate tens of billions of dollars from offerings in China. The Bitcoin Asia Conference can now imagine organizing its event in Hong Kong next year as well.

Conclusion: Hong Kong on the way to becoming the crypto center of China

At a good $200 million, investments in Bitcoin and Ethereum ETFs in Hong Kong have so far remained within the expected range. One difference from Bitcoin ETFs in the USA is that you can also pay with BTC or Ethereum. Optimists are now hoping that Beijing will also establish rules for crypto outside of Hong Kong that will help the crypto industry out of the legal gray area.

Because a Bitcoin boom in China could send the global crypto markets into positive territory, capital is available on a large scale in the “Middle Kingdom”. Seen in this way, the Bitcoin ETFs in Hong Kong would be a sign of a China that can hardly afford to lag behind global trends when it comes to crypto.

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(Featured image by amhnasim via Pixabay)

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First published in BLOCK-BUILDERS.DE. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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