China’s surge in gold trading activities has sparked discussions about the potential implications for the cryptocurrency markets, particularly Bitcoin. Vivek, the founder of Bitgrow Lab and a Bitcoin advocate, highlighted this trend on X (formerly Twitter), sharing a graph showing a leap in China’s gold trading from under $1 million to over $2 million. Vivek speculated that China’s increased gold purchases may be a preparation for the potential collapse of the USD, suggesting a connection to Bitcoin.
This observation comes at a time when Hong Kong has recently approved Bitcoin spot Exchange-Traded Funds (ETFs), which could open new opportunities for cryptocurrency investment in the region.
Hong Kong’s move to approve Bitcoin spot ETFs is a significant step forward in integrating cryptocurrencies into mainstream financial markets. Richard Byworth, Managing Partner at SyzCapital, recently mentioned that these ETFs might soon be accessible to investors from mainland China. Byworth made these comments after his visit to Hong Kong, where he noted discussions about adding the ETF to the stock connect program. This program, part of the broader Stock Connect initiative launched in 2014, links Hong Kong with mainland Chinese exchanges and could greatly expand access to Bitcoin investments.
The performance of these ETFs has been notable, with the ChinaAMC Bitcoin ETF gathering $121 million on its debut. Harvest Global Investments, one of the issuers of Hong Kong’s first spot Bitcoin and Ethereum ETFs, confirmed plans to potentially open these funds to mainland investors. CEO Han Tongli mentioned at the Bitcoin Asia conference that they are open to the possibility of including their ETFs in the connect program, as long as everything goes smoothly in the next two years.
While China’s increased gold trading activity is evident, the direct impact on Bitcoin is yet to be fully understood. Despite speculation that Bitcoin could benefit from China’s gold buying spree, the cryptocurrency has faced challenges breaking above the $67,000 resistance. Currently, Bitcoin trades at $67,042, experiencing a slight decrease of 0.2% in the past 24 hours but maintaining an overall uptrend of nearly 10% over the past week.
The potential integration of Bitcoin ETFs into the Stock Connect program could have significant implications for the cryptocurrency market, especially considering the limited access to such products for mainland investors in the past. Hong Kong’s regulatory environment is more open to cryptocurrencies compared to mainland China, where commercial crypto activities are largely banned, although trading and ownership by individuals remain in a legal gray area.
