‘A Very Big Deal’—Crypto Suddenly Braced For A Huge China ETF Earthquake After Bitcoin, Ethereum And XRP Price Boom

Bitcoin BTC has exploded over the last year, sending the bitcoin price to over $70,000 as top Wall Street executives sound an "urgent" alarm over a U.S. dollar time bomb.

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The bitcoin price has rocketed past its previous all-time high of $69,000 per bitcoin —pushing up the ethereum price, while XRP has added 50% since its May 2023 lows—with its rally being largely put down to the debut of a fleet of Wall Street spot bitcoin exchange-traded funds (ETFs) in January (triggering a huge $75 trillion bitcoin price prediction).

Now, as Elon Musk teases an X upgrade that some bitcoin and crypto traders think could transform the market, analysts have predicted a Hong Kong spot bitcoin ETF in China could mean another "huge" bitcoin price earthquake is just around the corner.

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"Looks like Hong Kong is going to allow in-kind creations and redemptions for spot bitcoin ETFs in [the second quarter of 2024]," Bloomberg Intelligence analyst Eric Balchunas posted to X, adding that unlike the Wall Street spot bitcoin ETFs that are cash creations only, "in-kind" could "help spark assets under management and volume in the fast-growing region."

"This refers to the redemption mechanism, with 'in kind' offering greater operational simplicity as well as more efficient tax and cost implications," Noelle Acheson, author of the Crypto is Macro Now newsletter, wrote in a note.

"While this detail alone is not enough to ensure strong inflows, it does imply a more open and agile approach to the potential market, which in turn could attract a broader range of participants. It also suggests that approval is getting close—this would be a very big deal," Acheson wrote, adding, "Asian crypto exchange volumes are orders of magnitude greater than those from the U.S., according to data from The Block."

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China has repeatedly cracked down on bitcoin and crypto trading in the country, most recently in 2021. Since then, most people in China have had no way of buying bitcoin, ethereum, XRP XRP or any other cryptocurrency.

However, Hong Kong, a special administrative region of China, has begun gradually opening up the bitcoin and crypto market to traders, creating an avenue that could allow money to flood in.

"Even a tiny percentage of Chinese investors finding a legal way [to invest in bitcoin] would be significant," Acheson told Coindesk, adding bitcoin ETF approval in Hong Kong would be "huge."