Analysts say China-related tokens such as VeChain 
VET
-11.40%
and Neo have been serving as proxy bets on Hong Kong’s bid to become an Asian crypto hub.
Amid speculation that Hong Kong regulators could soon approve spot bitcoin and ether exchange-traded funds, ETFs, both tokens have posted double-digit weekly gains. According to The Block’s Prices Page, VeChain is up over 21% and Neo is up over 53% in the past week.
“Especially for retail and fast money circles, VeChain and Neo are seen as proxies for Asian demand. Neo, for example, is known colloquially as ‘Ethereum of China,'” Wintermute analysts told The Block.
Hong Kong as Asia crypto hub
The analysts said Hong Kong’s efforts to establish itself as a cryptocurrency hub in the East may have contributed to Neo’s outperformance and notable flows into VeChain and Conflux. “The basket of tokens was on many fast-money radars around June 2023 as Hong Kong opened up retail crypto licenses, with many trading it as a proxy for APAC flow,” the Wintermute analysts added.
Each token’s move higher comes amid news that Hong Kong regulators could approve spot ETFs based on bitcoin and ether as early as Monday.
According to Bloomberg, citing people familiar with the matter, a subsidiary of Chinese asset manager Harvest Fund Management Company is expected to clinch approval to operate as an issuer of a bitcoin and an ether fund. In addition, a partnership between Bosera Asset Management (International) Co. and HashKey Capital will likely receive approval to offer both types of spot exchange-traded funds (ETFs) in Hong Kong.
Hong Kong spot bitcoin ETF approval anticipation
According to Friday’s Coinbase report, anticipation over the potential approval of spot bitcoin and ether ETFs in Hong Kong shows a development in the cryptocurrency economy.
“Outlooks beyond the U.S. now play a meaningful part in bitcoin’s overall price discovery,” Coinbase analysts said.
The weekly report added that most of the recent net buying of bitcoin has occurred outside of the U.S. trading day. “The potential approval of spot bitcoin ETFs in Hong Kong next week could accentuate this trend and enable bitcoin access to even broader pools of capital,” the report said.
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