Hong Kong's financial regulators are looking into implementing models for spot Bitcoin exchange-traded funds (ETFs) that allow for in-kind creation.

This move could present a substantial market opportunity, potentially increasing assets under management (AUM) and trading volume for Bitcoin ETF issuers in the region. Bloomberg ETF analyst Rebecca Sin, in a research note shared on March 26 by Eric Balchunas, highlighted the significance of Hong Kong's approach, contrasting it with the U.S. Securities and Exchange Commission's (SEC) cash-only creation model for spot Bitcoin ETFs.

Bitcoin ETFs have accumulated a total of $11.28 billion in flows since their launch, experiencing a net negative of $1.07 billion in net flows last week before rebounding on Monday. Despite five consecutive days of negative outflows last week, U.S. spot Bitcoin ETFs saw over $15 million in flows on March 25, coinciding with Bitcoin's highest daily close in over 10 days, surpassing $69,000.

This influx of ETF inflows helped Bitcoin's price surpass $70,000 on March 25, with investors returning to accumulate BTC off exchanges, leading to a nine-year low in BTC supply on Coinbase. Bitfinex analysts reassured that last week's negative ETF outflows, primarily from the Grayscale Bitcoin Trust (GBTC), are not a long-term concern, attributing them to investors transitioning away from GBTC's higher fees and taking profits, particularly those who entered during the bear market.

They noted that GBTC investors are not the sole sellers, as whale wallet activities also indicate significant profit-taking.