Bitcoin ETFs Made in ChinaSeveral Chinese investment funds are preparing for listing through their Hong Kong subsidiaries. The approval of Bitcoin ETFs for these funds may come much earlier than expected.
As a reminder, Bitcoin has been stagnant in China for more than two years. It is not illegal to own Bitcoin, but exchanges were banned in 2021. Therefore, it is impossible to get Bitcoin with a few clicks of the mouse.
However, Chainalysis estimates that Bitcoin trading volume will be equivalent to $86 billion between July 2022 and June 2023. The trading volume in Hong Kong is $64 billion. Bitcoin continues to circulate underground, that is, in P2P transactions.
In 2021, Bitcoin miners were also banned. They now account for only 15% of the global hash rate, down from 60% before the "ban". However, many individuals continue to mine despite the high cost of electricity.
As we wrote in our article Bitcoin Halving - A Fatal Blow for Miners:
"Why mine at a loss? Simple: Get your money out, or exchange your RMB for dollars. They exchange RMB for ASICs and electricity, which then generate BTC, which they exchange for dollars."
In fact, Bitcoin is a way to evade China's strict capital controls.
But Hong Kong often acts as a safety valve. For example, Reuters reported in January that cryptocurrency exchange shops are everywhere on Hong Kong's shopping streets:
"At Crypto HK, a popular store in Admiralty, customers can buy Bitcoin for as little as HK$500 ($64) without providing ID."
