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Samsung is starting to trade Bitcoin in Asia. What’s going on?

Igor Grigorchenko

News editor

Jan 13, 2023 at 03:31

The financial-investment division of Samsung, Samsung Asset Management, quite unexpectedly for many, has begun trading Bitcoin in Asia. The company has already launched a futures ETF and is negotiating to launch a spot ETF. Let’s discuss this news as well as the important things standing behind it.

What’s the news about?

Samsung has successfully registered and launched the Samsung Bitcoin Futures Active ETF on the Hong Kong stock market. This ETF, based on futures contracts, plans to sell Bitcoin in Asian markets. According to Bloomberg, Samsung is not going to stop at this product and is already preparing to launch a spot ETF in Hong Kong, which is negotiating with the local regulator right now.

Samsung’s activity in this specific area is simply astonishing. Recall that in late 2022, the same Samsung launched the first Samsung Blockchain Technologies ETF in Asia, which trades an index of companies associated with the development of blockchain.

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As a result, the company is gradually developing a full range of products, allowing significant investors in Asia to invest in the crypto/blockchain industry.

I invite you to reflect on why one of the largest electronics manufacturers in the world suddenly decided to start trading crypto (I honestly thought it was a joke until I saw the working ticker in the Bloomberg terminal). Right before our eyes, there is probably a paradigm shift in the attitude towards cryptocurrency. Instead of looking at that, I suggest we focus on another aspect of this rather unusual news story.

Let’s reject the simple answer that first comes to mind: “The world is just going crazy.” It seems to me that behind this eccentric story with Samsung, there is something big hidden.

What is an ETF?

For starters, let me briefly remind you what ETFs are. You can read a strict definition at this link, but I’ll try to explain it much more simply. An ETF, in relation to crypto, is a gateway for money, a way for large (and extra-large clients the size of a bank or hedge fund, commonly referred to as institutional investors) to get into a risky asset, which is Bitcoin. It’s a legal way for them to invest in crypto as easily as possible. 

There are different types of ETFs, but the most proper and honest is the spot ETF (don’t get bogged down in the details, just trust me on my word).

Now, look how interesting it all turns out. 

Asia takes the initiative

America is supposed to be the land of innovation and bold vision, but just a week ago, the SEC USA once again rejected a request for a spot ETF that would have given big investors the opportunity to pump big money into crypto. It looks like that opportunity is just closed in the US for the next few years.

On the other hand, we see an interesting counterplay by other countries. For example, Hong Kong has confirmed its course on the crypto industry, and the financial secretary said the jurisdiction is ready to accept cryptocurrency companies from all over the world.

This liberal and more open approach was immediately taken by Samsung (and other less prominent players), which right now is negotiating to open a spot ETF (and has already opened a regular futures ETF).

China is moving toward the cryptocurrency market, too (despite the opinion that any cryptocurrency transactions in this country are considered completely illegal). In the last month, China has become a major source of new capital inflows into the cryptocurrency market. For example, to the surprise of many, a week ago, China opened its first official Bitcoin futures ETF, which raised $100 million just at the start of trading.

Once again, speaking of ETFs, we are talking about the arrival of new big money in the crypto world (and hence new prices for Bitcoin and Ethereum), which is why these three capital letters are so important. And then the unexpected seems to be happening — the old world, represented by the US and Europe, is rapidly losing the initiative. In fact, these leaders seem to be more conservative, slow, and closed to real innovation. In my recent article about three factors of Bitcoin price growth, I called the China activation factor one of them (though it would be more accurate to call it the Asia activation factor).

So Samsung became a symbol of something bigger — it seems that the center of gravity of decision-making in crypto is gradually shifting to Asia. I recommend thinking seriously about this conclusion, so it will be easier to understand why the market sentiment has changed so much in the last month. To summarize, I would call this new trend “digitalization with Asianization.” The so-called “Asian tigers” seem to start their own big game. 

USA, now it’s your turn!

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