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How is Hong Kong’s new crypto policy beneficial to Bitcoin investors?

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How is Hong Kong’s new crypto policy beneficial to Bitcoin investors?

  • Hong Kong’s securities regulator will limit the retail investors’ exposure to crypto assets with high liquidity. 
  • Samsung’s investment arm will list Bitcoin futures ETF on the local stock exchange. 

Hong Kong has moved to embrace the crypto industry despite a ruthless winter that has discouraged neighboring countries like Singapore from investing in this volatile industry. The island city’s top securities regulator recently issued a directive to drive investment in certain crypto assets with high liquidity. 

Highly liquid crypto assets for retail investors in Hong Kong

The Securities and Futures Commission (SFC) of Hong Kong has hinted at the introduction of new legislation that will promote digital assets with high liquidity. According to a report by the South China Morning Post, the securities regulator has revealed that trading in virtual assets will be restricted to highly liquid products for retail investors. 

SFC CEO Julia Leung Fung-yee said:

“Some virtual assets platforms have over 2,000 products, but we do not plan to allow retail investors to trade in all of them. We will set the criteria that would allow retail investors to [only] trade in major virtual assets.” 

The SFC is planning to issue a consultation paper in the next two months. This paper will outline the products and conditions for retail investors who wish to trade in virtual assets. The licensing requirements for virtual asset trading firms will also be detailed in this document. 

Samsung’s investment arm set to list BTC futures ETF

Hong Kong’s liberal stance on the crypto market has attracted the attention of tech giant Samsung’s investment arm. Samsung Asset Management Hong Kong (SAMHK), a subsidiary of Samsung’s investment arm Samsung Asset Management, will list the Samsung Bitcoin Futures Active ETF on Hong Kong’s stock exchange on 13 January. 

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As of now, Hong Kong is the only Asian market that allows trading of Bitcoin Futures ETFs. The Hong Kong Crypto Futures ETF currently boasts a trading volume of $70 million. However, the regulatory clarity from the island city’s administration has also played a major part in attracting investment. 

Ser Suzuki Shillsalot has 8 years of experience working as a Senior Investigative journalist at The SpamBot Times. He completed a two-hour course in journalism from a popular YouTube video and was one of the few to give it a positive rating. Shillsalot’s writings mainly focus on shilling his favourite cryptos and trolling anyone who disagrees with him. P.S – There is a slight possibility the profile pic is AI-generated. You see, this account is primarily used by our freelancer writers and they wish to remain anonymous. Wait, are they Satoshi? :/

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Bitcoin

Grayscale CEO: It is ‘a matter of when and not if’ the SEC approves a spot Bitcoin ETF

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Grayscale CEO: It is ‘a matter of when and not if’ the SEC approves a spot Bitcoin ETF

Several bitcoin futures exchange-traded funds are now trading in the U.S, with more to come. For example, SEC approved the Teucrium Bitcoin Futures ETF earlier this month, filed under the Securities Act of 1933. Also, other Bitcoin Futures ETFs approved over the last year were approved under the Investment Company Act of 1940.

But a spot bitcoin ETF remained elusive. However, the market is hopeful that the spot Bitcoin ETF will arrive this year despite the uncertainty. 

Change your lens 

Grayscale Investments CEO Michael Sonnenshein, in an 17 April interview with CNBC commented on this development. He opined:

“From the SEC standpoint, there were several protections that 40 Act products have that 33 products don’t have, but never ever did those protections address the SEC’s concern over the underlying bitcoin market and the potential for fraud or manipulation.

So the fact that they’ve now evolved their thinking and approved a 33 Act product with Teucrium really invalidates that argument and talks to the linkage between the Bitcoin futures and the underlying Bitcoin spot markets that give the futures contracts their value.”

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Here’s some content. Unlike previous futures ETF applications, the aforementioned ETF filed under the “33 Act” (or the Securities Act of 1933) and the “34 Act” (or the Securities Exchange Act of 1934). The past Bitcoin futures ETFs were filed under the “40 Act” (the Investment Company Act of 1940).

Following this, the executive asserted his optimism for a spot application incorporating Bitcoin. “It really is, a matter of when and not if” there is a Bitcoin spot ETF, Sonnenshein said. He further added that the U.S. SEC should look at the futures ETF and the spot ETF through the same lens.

If not so, then the securities regulator is violating the “Administrative Procedure Act violation”. Even in the previous month, the said firm raised a similar flag. In a 29 March Bloomberg interview, Grayscale‘s CEO opined that his company would consider suing the SEC if it did not approve its Bitcoin spot ETF.

This explains it 

Grayscale had filed for converting its Grayscale Bitcoin Trust to a spot Bitcoin ETF filed in October 2021. Although, faced rejection in February this year. Nonetheless, they shall hear back from the SEC by July this year. Well, that’s not it.

A 2022 Bitwise/ETF Trends Survey found that 82% of advisors preferred a spot bitcoin ETF over a futures-based alternative. Clearly, the demand is overwhelming.

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Shubham is a full-time journalist at AMBCrypto. A Master’s graduate in Accounting and Finance, Shubham’s writings mainly focus on crypto-regulations across the United States and Europe. Also, a die-hard Chelsea fan #KTBFFH.

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Arcane Research

ProShares ETF’s BTC holdings touches ATH, but there are some warning signs

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ProShares ETF’s BTC holdings touches ATH, but there are some warning signs

Bitcoin climbed to more than $44,000 for the first time in almost a month, breaking out of its recent narrow trading range amid a renewal of risk appetite. At press time, BTC was trading at the $44.7k mark with a 3% surge in 24 hours.

Give me more 

It is quite obvious that investors have rushed in to get more Bitcoin exposure. Now, the first Bitcoin futures exchange-traded fund (ETF) in North America, the Purpose Bitcoin ETF, is making headlines. 

The total Bitcoin exposure in ProShares ETF trading under the ticker BITO on the New York Stock Exchange climbed to a new all-time high above 28K BTC, as of 22 March, after witnessing two weeks of solid inflows. As per information from Arcane Research, this was evident in the graph below. 

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Source: Arcane Research

In fact, according to data from Glassnode, the aforementioned number witnessed a net increase of > than 2000BTC within 24 hours. The Canadian ETF currently holds 36,271.8 BTC as shared by Wu Blockchain on 25 March.

The rise occurred as a result of the massive traction of capital since both the market and the price of Bitcoin improved over the last two weeks. Overall, the strong inflows to BITO suggested that Bitcoin appetite through traditional investment vehicles has increased significantly.

The ProShares Bitcoin Strategy ETF (BITO) had the second-biggest trading debut for any ETF on record on 19 October. Its unit price jumped 4%.

So interested?

The benchmark crypto saw some relief in the past days, but seems unlikely to reclaim its earlier bullish momentum fully. Arcane Research recorded no significant Open Interest (OI) movements for the BTC-based derivatives sector. This metric has remained stable at around 360,000 BTC and 380,000 BTC since beginning of 2022.

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Source: Arcane Research

As seen above, the OI for BTC futures moved sideways along the price of Bitcoin, as it registered a decrease in volatility. In other words, the BTC market could experience a period of low activity, ergo, suggesting no significant trends in either direction.

The 30-day volatility saw a 1% low in March, and trended slightly higher in the last two weeks. At press time, the metric stood at 1.5%. Nonetheless, this neutral scenario didn’t entirely stop BTC’s accumulation. Lark Davis, a renowned trader, shed light on this narrative in a tweet on 24 March.

Heavy #bitcoin accumulation has happened between 38-45k pic.twitter.com/zpRGcht6so

— Lark Davis (@TheCryptoLark) March 24, 2022

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