Matrixport predicts $25 billion inflow into Bitcoin ETF

13.04.2024

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Matrixport, a company specializing in cryptocurrency market analysis, recently published a report in which its experts share their predictions regarding the potential demand for spot Bitcoin Exchange Traded Funds (ETFs) from Chinese investors after their launch in Hong Kong. According to the analysts, this demand could reach an impressive sum of $25 billion.

This estimate is based on the assumption that investors from mainland China will actively use the Southbound Stock Connect program, which allows them to invest up to $70 billion annually in stocks traded on Hong Kong exchanges. Currently, a significant portion of this quota, around $25 billion, remains unused each year. Matrixport analysts believe that these funds will be directed towards Bitcoin ETFs after their launch.

Such interest from Chinese investors can be attributed to several factors. Firstly, the yuan is at a multi-year low against the US dollar, which encourages investors to seek ways to diversify their assets and protect their capital from further depreciation. Secondly, the launch of spot Bitcoin ETFs in Hong Kong will provide qualified investors from China with a legal and regulated way to gain exposure to the first cryptocurrency, which was previously difficult due to restrictions imposed by the authorities.

Large Chinese financial institutions, such as Harvest Fund and Southern Fund, have already expressed their readiness to offer their clients the opportunity to invest in Bitcoin ETFs through their Hong Kong subsidiaries. This indicates a growing interest in cryptocurrencies from traditional players in the financial market and could lead to further legitimization and popularization of digital assets in China and beyond.

However, it is worth noting that the launch of spot Bitcoin ETFs in Hong Kong is still under consideration by local regulatory authorities. Nevertheless, if these financial products are approved, they could become an important tool for Chinese investors seeking access to the rapidly growing cryptocurrency market and seeking to benefit from the growth potential of Bitcoin in the long term.

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