Recent developments have seen China significantly increase its gold trading activities, sparking discussions about potential implications for the cryptocurrency markets, particularly Bitcoin. The surge in gold purchases by China, as noted by Bitcoin advocate and Bitgrow Lab founder Vivek, has raised questions about the country’s strategy amidst global economic uncertainties.
Vivek highlighted this trend on X (formerly Twitter), where he shared a graph showing a substantial rise in China’s gold trading from under $1 million to over $2 million. Alongside the graph, Vivek speculated, “China is buying gold like never before. Preparing for USD collapse? #Bitcoin.”
This observation comes at a time when Hong Kong has recently approved Bitcoin spot Exchange-Traded Funds (ETFs), potentially opening up new opportunities for cryptocurrency investment in the region.
Hong Kong’s approval of Bitcoin spot ETFs marks a significant step forward in integrating cryptocurrencies into mainstream financial markets. Richard Byworth, Managing Partner at SyzCapital, recently suggested that these ETFs may soon be accessible to investors from mainland China.
Byworth’s remarks came after his visit to Hong Kong, where he observed discussions about incorporating the ETF into the stock connect program. This program, part of the broader Stock Connect initiative launched in 2014, connects Hong Kong with mainland Chinese exchanges and could greatly expand access to Bitcoin investments.
The debut performance of these ETFs has been remarkable, with the ChinaAMC Bitcoin ETF gathering $121 million on its launch. Harvest Global Investments, one of the issuers of Hong Kong’s first spot Bitcoin and Ethereum ETFs, has expressed plans to potentially open these funds to mainland investors.
CEO Han Tongli stated at the Bitcoin Asia conference, “We do not rule out applying for our ETFs to be included in the connect program, as long as everything proceeds smoothly in the next two years.”
While the increase in China’s gold trading activity is evident, the direct impact on Bitcoin is still not fully understood. Despite speculation that Bitcoin could benefit from China’s gold buying spree, the cryptocurrency has struggled to break above the $67,000 resistance.
Currently, Bitcoin is trading at $67,042, down by 0.2% in the past 24 hours, yet maintaining an uptrend of nearly 10% over the previous week.
The potential integration of Bitcoin ETFs into the Stock Connect could have a significant influence on the cryptocurrency market, especially considering the limited access to such products for mainland investors in the past.
Hong Kong’s regulatory environment is notably more open to cryptocurrencies compared to mainland China, where commercial crypto activities are largely prohibited, though trading and ownership by individuals remain in a legal gray area.