Hong Kong Approves First Bitcoin and Ether Spot ETFs

Written By
G. Dautovic
April 15,2024

On April 15, Hong Kong made a significant move in the crypto adoption by conditionally approving its first spot Bitcoin (BTC) and Ether (ETH) exchange-traded funds (ETFs). 

Today’s decision by the Hong Kong Securities and Futures Commission (SFC) marks a major development as Hong Kong becomes the first Asian jurisdiction to integrate the two largest cryptocurrencies into its regulated investment framework.

The SFC has conditionally approved ETF applications from at least three local issuers, among which are Hong Kong units of Chinese asset managers Harvest Fund Management, Bosera Asset Management, and China Asset Management (ChinaAMC).

"Launching the virtual asset spot ETFs not only provides new asset allocation opportunities but also reinforces Hong Kong’s status as an international financial center and a hub for virtual assets," stated a spokesperson from Bosera Asset Management, which, in partnership with Hong Kong-based HashKey Capital, is set to launch its products with an innovative "in-kind" subscription mechanism, allowing investors to contribute directly with BTC and ETH.

Meanwhile, the Hong Kong unit of ChinaAMC also received approval to provide virtual asset management services and is actively developing its spot ETFs. "The conditional approval will help our goal of promoting industry innovation and meet diverse demand among investors," said Han Tongli, CEO of Harvest Global Investments, reflecting the optimistic sentiment shared by his peers.

This regulatory milestone comes shortly after the U.S. saw its first ETFs tracking spot Bitcoin, which attracted approximately $12 billion in net inflows, signaling strong market demand. 

The Hong Kong ETFs' approval is expected to draw significant interest as well, as the prospect of a new investment option during Asia trading hours could unlock some institutional demand.

"We believe this will be bullish in the short term, but there are more important narratives and drivers such as macro events," shared QCP Capital, a Singapore-based digital assets trading house, highlighting the broader implications of Hong Kong's move on the global financial landscape.

The introduction of these ETFs is expected to unlock fresh asset allocation opportunities for investors and will further solidify Hong Kong's reputation as a global financial hub and the Asian leader in the virtual asset space. The move comes as a part of Hong Kong's broader strategy to distinguish itself as a premier center for digital assets, contrasting with the stricter regulatory environment for cryptocurrencies in mainland China.

About author

I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm. This position proved invaluable for learning how banks and other financial institutions operate. Daily correspondence with banking experts gave me insight into the systems and policies that power the economy. When I got the chance to translate my experience into words, I gladly joined the smart, enthusiastic Fortunly team.

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