**Hong Kong's Bitcoin and Ethereum ETFs Could Fetch $25 Billion—If China Plays Nice**

Hong Kong is gearing up to introduce spot Bitcoin and Ethereum exchange-traded funds (ETFs), potentially trading by the end of this month. According to Joeyfree, founder of 10x Research, these ETFs could significantly influence the cryptocurrency market, contingent on the participation of Chinese mainland investors.

Recently, Hong Kong conditionally approved ETF applications for Bitcoin and Ethereum, signaling a possible surge in crypto asset demand reminiscent of the increase following the U.S.'s approval of spot Bitcoin ETFs. This approval could further propel the ongoing bull market in cryptocurrencies.

The Shanghai Stock Exchange's southbound stock connect program, allowing mainland investors to access Hong Kong financial assets, plays a crucial role in the potential success of these ETFs. With a substantial annual quota largely underutilized in recent years, mainland investors could inject between $15 billion to $25 billion into these ETFs if allowed.

However, Joeyfree notes the likelihood of these ETFs joining the southbound connect program soon is low, as current regulations require a six-month listing period for eligibility. Despite this, there's optimism surrounding Bitcoin as a diversification option for China, amidst the nation's property and stock market concerns.

While China's strict stance on cryptocurrency activities remains, the move by Hong Kong to approve these ETFs suggests a potentially softer approach towards regulated crypto products. This development is seen as part of China's broader strategy to utilize Hong Kong as a testing ground for crypto initiatives, considering the territory's recent steps towards becoming a crypto hub.

Despite cultural preferences for direct investments over basket-type products in Asia, the nature of these ETFs as representing individual assets might lead to greater acceptance and success compared to other types of ETFs.