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How the Approval of Bitcoin ETF in Hong Kong May Turbocharge the Post-Halving Rally

Hong Kong’s Bitcoin ETFs: a catalyst for the halving rally?

As Hong Kong moves closer to approve its first Bitcoin ETFs, the crypto community discusses the consequences. 

Key takeaways:

  • Hong Kong's potential approval of Bitcoin ETFs could ignite a Bitcoin halving rally.
  • Mega whales are accumulating Bitcoin in anticipation of regulatory changes and market effects.

The crypto community is buzzing with the news that the Securities Regulatory Commission of Hong Kong (SFC) is close to approving the first batch of spot Bitcoin ETFs. This approval, potentially happening by April 15, aligns closely with the anticipated Bitcoin halving event, which will reduce the supply issuance rate of BTC. Local news reports suggest that this approval could significantly heighten Bitcoin buying demand by making BTC accessible to both retail and institutional investors in Hong Kong.

Crypto entrepreneur Lark Davis highlighted the broader implications in a recent X post: 

“Hong Kong likely to approve BOTH Bitcoin and Ethereum spot ETFs as soon as Monday! China is about to start bidding the same week the Bitcoin halving is happening!” 

This anticipated regulatory change is expected to finalize ETF listing procedures on the Hong Kong Stock Exchange within two weeks following approval.

Influential voices weigh in on ETFs and Bitcoin’s market prospects

The market is on the verge of a potentially transformative phase, influenced not only by the 2024 Bitcoin halving but also by strategic institutional activities. Herbert Sim, Chief Operating Officer at crypto exchange Websea, emphasized the combined impact of the halving and ETF approvals: 

“Halving is not the only thing to look out for in the price action. But rather the upcoming Bitcoin ETF approval in Hong Kong, which also happens next week. The big banks of China will all have to start buying Bitcoin themselves too.” 

He expects that the new ETFs will amplify the institutional demand already spurred by large U.S. ETF issuers like BlackRock, projecting that “prices will definitely soar.”

Sim’s sentiments are echoed by large investors, or mega whales, who are strategically accumulating Bitcoin in anticipation of these events. Crypto commentator Bitcoin Munger noted the activity of these investors in an X post: 

“The only cohort that is net-accumulating Bitcoin is the largest whales (>10k). Just ahead of Hong Kong ETF approvals and the halving. A positive contrarian signal if I had to guess.”

ETFs and their role in Bitcoin’s price dynamics

The relationship between ETF inflows and Bitcoin’s price action has been notably strong, a trend that Thomas Fahrer, co-founder of Apollo, pointed out:

“I would have thought it was extremely obvious that ETF flows are driving Bitcoin [price]…” 

By mid-February, Bitcoin ETFs accounted for about 75% of new investments in the cryptocurrency as it breached the $50,000 threshold, underscoring the significant role that these financial products play in the market dynamics of Bitcoin.