Matrixport: The Hong Kong Bitcoin Spot ETF is expected to attract $25 billion in capital inflow from mainland China

According to a research report released by crypto asset service provider Matrixport, the Bitcoin spot ETF listed in Hong Kong is expected to attract up to $25 billion in capital inflows from mainland Chinese investors through the "Southbound Trading" mechanism.

The report points out that Chinese investors can purchase up to $70 billion worth of Hong Kong-listed stocks each year using Southbound Trading, but the actual inflow over the past three years has been $15-25 billion less than this quota. This means there is an unused quota of HK$1000-2000 billion (approximately US$12.5-25 billion) per year available for Bitcoin ETF products.

Matrixport stated that recent news suggests that Hong Kong, which hosts the world's largest offshore RMB market, will approve Bitcoin ETFs. Mainland Chinese investors have shown significant interest in diversified investments and a continuous decline in the RMB/USD exchange rate has also increased hedging demand. Insiders from Hong Kong revealed that several mainland China fund companies have applied for issuing spot ETF products through their subsidiaries based in Hong Kong.