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Hong Kong is ready to introduce Ethereum spot ETFs before the United States

While in the United States there is a debate about the feasibility of the SEC approving the spot ETF on Ethereum, in Hong Kong it is taken for granted that the regulated investment product will first appear on Chinese exchanges.

According to some reports from local Eastern media, it seems that the monetary authorities of Hong Kong are starting to consider introducing this kind of exchange traded fund in the markets.

In the USA, the deadline for potential approval or rejection is May 23rd: given the concerns raised by President Gensler regarding the financial nature of Ethereum, speculation is beginning to arise that the ETF will be rejected in this initial round.

Who will win first? The States or Hong Kong?

Everything you need to know below.

Deadline for the Ethereum spot ETF in the USA set for May 23: heading for rejection?

After the approval in January of Bitcoin spot ETFs in the USA, Ethereum investors expect the Securities and Exchange Commission to soon open the doors to regulated investments on Nasdaq for the second most capitalized cryptocurrency in the world.

Regarding this controversial topic, the feelings of those working in the cryptocurrency markets are currently in opposition, with some arguing that the ETF for ETH is imminent and others counteracting by saying that we are too early, but soon we will have the definitive answer.

The Bloomberg Intelligence information portal, directly picking up data transmitted by the SEC, recently reported the updated deadlines for the final response of the US federal entity, which precisely on May 23, 2024 will have to express its opinion on the approval or possible rejection of the Ethereum ETF presented by VanEck.

The next day it would be the turn of Ark Invest, and in the following weeks other Fund Managers who have previously applied for the investment product such as Hashdex, Grayscale, Invesco, BlackRock and Fidelity.

Although until a few days ago almost all the actors active in the cryptographic landscape agreed that the success of Bitcoin ETFs in America would necessarily push the SEC to approve the same type of fund for Ethereum, now things seem to be slightly different.

On March 8th, in fact, the President of the US market surveillance agency Gary Gensler expressed his hesitation regarding the need for an exchange traded fund for Ethereum in an interview on Bloomberg Television.

Gensler, among other things, is not yet able to definitively express what the financial nature of Ethereum is and whether it should be classified as an unregistered security.

These uncertainties could lead to a rejection by the SEC in such a hectic moment of the market.

Anyway, we remember that even when discussing the same topic on the Bitcoin front in 2023, Gensler and his henchmen had raised similar doubts, casting doubt on the usefulness of decentralized currency.

The uncertainty conveyed by the words of the SEC chief then spilled over into investors’ projections, who in the decentralized forecasting market Polymarket quoted a 30% approval of the regulated financial product by the end of May.

In January, the chances of acceptance had even doubled compared to current values, around 60%, driven by the euphoria for investments in Bitcoin.

Most experts agree that this time we will not see the long-awaited Ethereum ETF in the United States, but we will have to wait for potential future developments and new deadlines.

etf ethereum hong kong us
Probability chart of approval of spot ETFs on Ethereum

The Ethereum ETF could land in Hong Kong before the United States

Despite uncertainties currently driving the narrative of the Ethereum spot ETF within the United States territory, a much more optimistic atmosphere can be felt in Hong Kong.

According to a local Chinese media report, then reported by the well-known reporter “Wu Blockchain“, Chinese monetary authorities are starting to consider an ETF for the second cryptocurrency in the market, as well as examining some questions for the same type of product on Bitcoin.

Chinese cryptographic experts believe that the need to relaunch the Hong Kong stock market after the sharp slowdown in recent years will be the key condition that will push for approval of regulated investment vehicles on Ethereum before a positive outcome in the USA.

Given the results achieved by US Fund Managers in recent days, which are attracting attention and desire in the minds of American investors, a similar product for Ethereum listed exclusively on Chinese exchanges could bring a significant flow of trading volumes to the eastern yang.

Regarding the possibility of an early listing compared to Western stock exchanges, Weng Xiaoqi, COO of HashKey Group, stated verbatim that:

“The delayed launch of spot ETFs by six months also means that it will take another six months for US capital to enter the market. At that point, it will have to face higher purchase costs and entry points, and will have to bear the risk of being tied up by US capital.”

Hong Kong, if it were to make this delicate decision, could obtain the status of Asia’s financial hub surpassing its American competitors and attracting significant capital in a moment of strong optimism for speculations.

Obviously all this would have a decidedly positive impact on the price of ETH, which, going through a phase of strong demand and contraction on the supply side, could soar in the market reaching new all-time highs around $5,000 in the coming months.

Alessandro Adami
Alessandro Adami
Graduated in "Information, Media and Advertising", for over 4 years interested in the cryptocurrency and blockchain space. Co-Founder of Tokenparty, community active in spreading crypto-enthusiasm. Co-founder of Legal Hackers Civitanova marche. Information technology consultant. Ethereum Fan Boy and supporter of Chainlink oracles, strongly believes that smart contracts will be central in the development of society.