The Regulatory Balance and Market Impact of Bitcoin ETF

The Bitcoin ETF is caught in a contradiction between driving market sentiment and raising doubts. The bullish narrative pushes BTC to break previous highs, while profit-taking by long-term holders leads to price corrections, which aligns with the operational logic of commodity markets.

From the perspective of commodity structure, the key issues and disagreements regarding Bitcoin/Ethereum spot ETFs in the future include:

1. Regulatory and product situation of Bitcoin/Ethereum ETF in Hong Kong;
2. Global Bitcoin/Ethereum ETF trading volume situation, becoming the world's only spot delivery opportunity;
3. The game between traditional finance and the virtual asset market, sources of funds and potential, and the layout of institutions.

Regulatory Attitude and Approval Speed

Different jurisdictions show different attitudes towards virtual asset ETFs, reflecting the differences between centralized and decentralized regulatory systems.

The European market ( includes Canada ), which relies on central authority for decision-making. The slow approval of the US ETF reflects the struggle between market institutions and regulatory bodies: the former believes that Bitcoin has commodity attributes, while the latter is concerned that its high volatility is detrimental to ordinary investors.

Hong Kong is expected to quickly approve virtual asset ETFs due to its unified regulatory discourse. In contrast, the approval process in the United States and Canada is relatively slow.

Product Design and Trading Arrangements

The Hong Kong virtual asset spot ETF has advantages in several aspects:

• The underlying positions include Bitcoin and Ethereum spot.
• Supports multi-coin trading
• Asian Trading Hours
• Flexible subscription and redemption methods
• Provide unlisted shares
• Regulated trading platforms and custodians
• Provide insurance protection

In contrast, the US ETF is limited to cash transactions and lacks regulatory protection. The Hong Kong futures ETF, on the other hand, carries higher risks and costs.

Market Size Expectations

It is expected that by the end of the year, the scale of the Hong Kong Bitcoin ETF could reach 10 billion USD. The major ETFs and Bitcoin trust funds in the United States have set benchmarks for Hong Kong products.

Hong Kong ETFs have two major advantages:

1. Spot delivery creates arbitrage opportunities, enhancing liquidity and market depth.
2. No need to pay withholding tax on dividends, resulting in higher investment returns.

This will drive virtual asset exchanges and traditional brokers to develop new businesses and obtain pricing power.

Impact on the Hong Kong Financial Market

The BTC ETF may exacerbate the outflow of funds from Hong Kong stocks, especially in the context of scarce quality assets. However, the entry of state-owned capital is expected to improve financing and customer expansion.

Traditional financial institutions need to integrate their layout and extend upstream and downstream in the industry chain to respond to the new market landscape.

Summary

The virtual asset spot ETF is a milestone in the Hong Kong virtual asset market, opening up avenues for compliant funds to enter and enhancing the image and legitimacy of virtual assets. This will increase market liquidity and acceptance, promote innovation and development in the crypto industry, and help Hong Kong establish its status as a world-class Web3 financial center.