This year, 75% of investment inflows were driven by the introduction of Bitcoin spot ETFs in the United States. Their combined balance now stands at $12.5 billion, with the U.S. accounting for over 95% of the global influx into crypto exchange-traded funds.
Interest in ETFs has been so strong that BlackRock’s fund has become the fastest-growing in history, accumulating $15.3 billion in just three months. It’s worth noting that the significant disparity with the total fund balance is due to outflows from Grayscale amounting to $16.3 billion. Similar investment inflows into cryptocurrency are now anticipated with the launch of spot ETFs in China.
According to Bloomberg insiders, the Hong Kong SEC could make a positive decision in the coming days.
China is not only the world’s second-largest economy but also a fairly closed country when it comes to capital outflows. The primary investment direction is the stock market, which has shown negative dynamics since 2021.
Moreover, a combination of factors suggests the potential for even further decline due to the real estate market crisis. This explains the remarkable surge in ETFs with shares of gold mining companies in April, with the premium jumping by 30% compared to the value of underlying assets. Fearing new financial shocks, Chinese investors are turning to assets less connected to the domestic economy. For this reason, they may show significant interest in Bitcoin ETFs.
For citizens of China, ETFs will become the optimal choice as cryptocurrency transactions on the mainland are undesirable for individuals and completely prohibited for financial institutions since 2021.
“Whales” were among the first to prepare for the arrival of the new catalyst: in the last 30 days, the number of addresses with a balance of over 1,000 BTC has increased by 2.6% to 2,124.
After SEC approval, it will take about 1-2 weeks before the new ETFs become available for investment. In the event of significant demand from Chinese investors, Bitcoin is poised to reach new heights as early as May.
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