News just broke about China once again and bitcoin. That news being that China is now looking into a possible release of a Spot Bitcoin ETF. Yeah you know that thing that's been bounced around for nearly a year now by the SEC.
What's going to happen is if governments don't start getting in front of this thing they are going to start to lose face and value in the overall markets. That's because crypto is and will be a leading edge of a global currency not locked to any one government or entity.
From constant threats and bashing and banning in China to now nearly full adoption of the currency it's clear that bitcoin has some serious power and pull. This flip flop however is nothing really new. Over the last 6 years if China approves it then the united states tries to reject it. If the United states rejects it then China tries to approve it. This back and forth tug of war has been going on for years now and the Spot Bitcoin ETF is just another peg in that battle.
This constant back and forth is exactly what you see with competing businesses and honestly governments have only become a business lately. They simply care more about their own power and money revenue generation over actully providing value back to their citizens and constantly keep increasing taxes left and right.
But in competition comes great innovation and approvals you would not have seen otherwise. This is exactly the case for Bitcoin and why I feel it's primed to make some serious moves as it becomes the battle ground between two of the largest market cap countries.
Either you adopt it or you get left behind is what they are quickly realizing.
Hong Kong
As of Nov. 2nd the SFC otherwise known as the Securities and Futures Commission of Hong Kong issued requirements for offering tokenized securities and other investment products. This allows for business to now tokenize just about anything and sell it on the blockchain.
This will only become more mainstream for things such as real estate, investments, stocks, bonds, treasury notes etc.
Of course there are always going to be bad actors in all of this which constantly becomes a thing and what gains the headlines. These will be constant blows to the crypto community but overall it should only create better and more structured releases and transparency so that people know and can see their real investments.
Hong Kong has also allowed for crypto ETFs for linking to futures contracts. This is something we see as common place now. But the big difference with a futures contract over a spot contract is in a futures contract you're not really buying the asset and it has no real ties to it. It's more like a bet or gamble on the price moving up and down over a period of time and still deals with fiat currency.
2024 will most likely be a hot bed topic for this and I think we will end up seeing a Spot ETF for at least bitcoin of which then soon Ethereum and a number of other core spot ETFs will come forward. These spot ETFs will in fact drive the price of these assets as it would be a direct investment into them through fully regulated entities making sure the assets are in fact backed up by what is being sold.
If both China and the USA released such an asset class I feel a vast majority would still be invested through the USA over China. China has a big run of corruption just take a look at their recent real estate bust. Now that's not to say the USA doesn't have it's own corruption but it feels at least a little less and that a majority of the world still trust USA backed investments over China.