China-Saudi ETF alliance may challenge US Bitcoin ETFs

China and Saudi Arabia have formed a strategic financial partnership that could impact US Bitcoin (CRYPTO:BTC) ETF liquidity. 

The agreement involves each country committing to invest $1 billion in each other's ETF markets, aiming to boost local investor interest and enhance regional financial markets. 

This collaboration follows Chinese President Xi Jinping’s recent visit to Riyadh, signaling deepened financial cooperation. 

Currently, US-based Bitcoin ETFs hold approximately $68.47 billion in net assets within the broader $9 trillion US ETF market, establishing their dominance globally. 

The US has maintained a significant lead in attracting global investors, but this new "liquidity-sharing" initiative between China and Saudi Arabia could create a shift. 

By making their ETFs more attractive to local investors, both countries aim to draw funds that might otherwise be directed towards US-based ETFs. 

Eric Balchunas, a Bloomberg analyst, remarked on the initiative, saying, “Even tho this is a bit inauthentic I can’t knock it as all of these countries constantly seeing the US steal away local investors like a liquidity vampire. The US has a quarter of all the ETFs in the world but has 70% of the global AUM and 84% of all the volume. You gotta fight for your liquidity.” 

In line with this partnership, Saudi Arabia’s Albilad CSOP MSCI Hong Kong China Equity ETF, valued at over $1.2 billion, has been launched on the Saudi Stock Exchange, marking the region’s largest ETF of its kind. 

This new asset may draw investors away from US Bitcoin ETFs, potentially reshaping the global financial landscape as regional players strengthen their positions. 

At the time of reporting, the Bitcoin price was $72,242.38.