According to Arthur Hayes, former CEO of BitMEX, China may be closely observing the United States’ handling of the pressure surrounding the spot Bitcoin Exchange-Traded Fund (ETF) through its “proxy asset manager” in Hong Kong. Hayes believes that this competition between the economic giants could bring benefits to Bitcoin, the largest cryptocurrency by market cap.

The news is circulating that Hong Kong might consider approving spot crypto ETFs as part of its ambition to become a central hub in Asia. However, it remains unclear which digital asset the Securities and Futures Commission (SFC) of Hong Kong will allow for trading, including an ETF.

Hayes speculates that if Hong Kong regulators follow the path of the Securities and Exchange Commission (SEC) in the United States, a spot Bitcoin ETF could become the first available product for retail and institutional trading.

Despite various applications from major Wall Street players like Fidelity and BlackRock, the SEC has not yet approved any spot Bitcoin ETFs as of early November 2023. Hayes compares BlackRock’s role as a “proxy asset manager” in the United States to Hong Kong’s potential role in China.

Hong Kong, being an administrative region of China, can serve as a gauge for how the country perceives digital assets due to its close ties with the mainland. It is worth noting that crypto trading and mining currently remain banned in mainland China.

On November 5, SFC CEO Julia Leung stated that Hong Kong might consider allowing retail investors to access spot ETFs linked to cryptocurrencies like Bitcoin if regulatory concerns are addressed.

As Hong Kong contemplates introducing spot crypto ETFs, several American investment firms are making efforts to launch similar products in the United States, despite facing persistent opposition from the SEC.

The approval of the first spot Bitcoin ETF in the United States could potentially pave the way for similar products in other regions, including Hong Kong. The news of a potential spot Bitcoin ETF in the world’s leading economy has already driven up demand, leading to new 2023 highs for BTC.

The evolving landscape of spot Bitcoin ETF developments in both the United States and Hong Kong presents an interesting dynamic for the cryptocurrency market. As China observes the United States, the successful approval of a Bitcoin ETF could have profound implications for the future of digital asset trading in various regions.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The NFT and cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.