We are not even halfway through 2024 and we can already be certain: this year will remain a milestone in the history of the crypto revolution with regard to spot ETFs. After the authorization of the SEC and the start of operation of Bitcoin ETFs in the United States in January, Hong Kong market regulators recently gave the green light to this modality there.
But here's an interesting difference worth highlighting: ETFs are also for Ether, not just Bitcoin. What difference does this make?
First let's talk about today's Hong Kong
The green light granted by Hong Kong regulatory authorities occurred for two institutions: Harvest Fund Management and Bosera Asset Management. As of January 2024, two other institutions were also seeking this permission: Samsung Asset Management and CSOP Asset Management, but so far they have not received such approval.
The planning that these financial institutions proposed is related to a legal framework introduced in June 2023, which brought new features such as not only opening the field of possibilities for ETFs with Ether, but also a series of measures that seek to protect those who invest in these assets.
All this occurs in the midst of a curious duality: while China has banned several activities related to cryptocurrencies, Hong Kong seeks to become a global reference in the crypto ecosystem.
Or, as they say, they want to become a specific financial center on this issue, both in regulatory terms and in the financial activities and flows involved.
A positive local and global moment
Just as we discussed how the Bitcoin halving should contribute to the advancement of its price, we have in this movement in Hong Kong another positive factor for the cryptocurrency and, in this case, also for Ether and all cryptos related to the decentralized finance (DeFi) universe.
Clearly, the influence will be greater on these two cryptocurrencies directly (Bitcoin and Ether), but we cannot help but consider that the effects are also positive for other associated cryptocurrencies because, through This step in Hong Kong opens up a strong possibility in Asia to access this type of assets.
Although with different profiles, people who invest in the United States and Asia have something in common: the investment potential could only become a reality upon authorization by regulatory authorities and availability by local financial institutions.
If you have followed the crypto universe for several years, the need for nearby financial institutions to unlock investments on a broader level — with more people and with more resources — may seem strange to you, but remember: it is precisely in this demographic of "I want to invest, I just don't know how" where significant advances can occur in these markets.
One thing is what we had when transactions with cryptocurrencies occurred between parties that practically discovered together the possibilities of this revolution and another very different thing is when the level of normalization achieved is so great that a person who had only heard about cryptocurrencies actually manages to buy and sell with the financial institution app you've used for a long time.
The union of the new flows coming from American retail with the various possibilities – and not only in Bitcoin, but also in Ether – that are now being released in Hong Kong point to positive winds for the prices of Bitcoin and Ether.
But it is worth reinforcing: such positive winds not only blow the sails of these two cryptocurrencies, they also help the navigation of other associated projects and the crypto market in general.
Where else can we expect some spark from these ETFs?
Culturally, it is easy to detect many differences between the West and the East. One of the most notable is in the distinction between savings and consumption. While in the Western world we are daily tempted to expand consumption possibilities and we have certain welfare state structures that seek to ensure a more financially peaceful old age, in the East the great habit is the accumulation of resources with the aim of alleviating poverty. financial situation of the next generations.
This cultural factor alerts us to an important aspect when the topic is investments made by people living in Asia: since the propensity to save with the aim of accumulating funds for the next generation is greater, any new investment possibility that is proclaimed as Resistant enough to appear in traditional institutions in an easier way—like in an app in the palm of your hand—it ends up generating interest and almost automatic demand.
The opening of this channel in Hong Kong already upsets the mood of the South Korean regulatory authority: this is another Asian country known for going through certain waves of attraction for investments in digital assets and, given that the recently authorized mobilization in Hong Kong began very actively in January and also that there have been Bitcoin ETFs authorized in the United States since January, questions have already been raised to the South Korean regulatory authority about when that other country will take a position on the issue, whether allowing the investment of its citizens or opening the possibility of new ETFs in the country itself.
So where should investors' attention be?
Different from what we used to talk about years ago, now the great focus of the crypto universe is not on “when will the time come when these technologies will begin to be adopted”, but on how much they are already becoming a reality in the present time.
The new demand coming from America—and soon also from Asia—should justify positive price adjustments in the coming periods. It is worth investing in trying to understand how this adoption could spread even further or be slowed in its expansion on the Asian continent.
Apparently, the distant and utopian future that many imagined for the crypto universe is beginning to become a reality. Riding this wave seems like a great idea!
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Image by Ryan Mac on Unsplash
