Asset management companies are gearing up to introduce spot Bitcoin and crypto Exchange-Traded Funds (ETFs) in Hong Kong, according to Livio Weng, the Chief Operating Officer (COO) of HashKey Group. In an interview with Chinese local media outlet Caixin, Weng revealed that seven to eight of these companies are in the advanced stages of launching these spot crypto ETFs. This suggests that not only Bitcoin but also altcoins could be offered as spot ETFs in Hong Kong.
This development positions Hong Kong as a leader in the Asian market, making it the first to permit the listing of virtual asset spot ETFs. The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) have been instrumental in this progress. In December 2023, they issued a circular expressing their readiness to accept applications for the authorization of virtual asset spot ETFs. This marks a significant shift from the SFC’s initial “professional-investors only” regulatory stance adopted in 2018 for the crypto market.
Julia Leung, the CEO of the SFC, underscored the regulatory body’s progress towards enabling retail investors to purchase spot Bitcoin and crypto ETFs. Leung highlighted the regulator’s openness to innovative technologies that enhance efficiency and customer experience, with appropriate risk management measures in place.
The SFC’s readiness to accept applications for the authorization of funds with exposure to virtual assets, including spot BTC and crypto ETFs, signifies a notable evolution in the regulatory landscape. It’s worth noting that Hong Kong has already permitted futures crypto ETFs, such as the Samsung Bitcoin Futures Active ETF, CSOP Bitcoin Futures ETF, and CSOP Ether Futures ETF, available through UBS’ local branch.
Furthermore, Hong Kong’s financial regulator has set guidelines for approving spot ETFs, embracing both “in-kind” and “cash creates” models. The in-kind ETF approach allows investors to exchange their existing assets for shares in the ETF, and vice versa. This bidirectional process enables investors to move between BTC and ETF shares seamlessly. This model is particularly appealing to those already holding Bitcoin who wish to diversify their investment portfolios without converting to traditional currencies. Conversely, the cash ETF model operates through the purchase and sale of ETF shares using conventional currencies, such as the Hong Kong Dollar or the US Dollar.
Gabor Gurbacs, founder of PointsVille and advisor to Tether and VanEck, commented on the developments, noting the increasing competition in the Bitcoin ETF market between Eastern and Western nations. He stated, “As I said many times, the East-West Bitcoin ETF competition is heating up. Hong Kong wouldn’t launch Bitcoin ETFs without China’s approval. China is determined to put up competition on institutional Bitcoin capabilities. Full nation state adoption game theory in effect.”
This move from Hong Kong could potentially boost the demand for BTC and crypto, attracting more institutional and retail investors. At the time of reporting, BTC was trading at $45,243.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Asia |
| Countries | 🇭🇰 🇨🇳 🇺🇸 |
| Sentiment | positive |
| Relevance Score | 1 |
| People | Livio Weng, Julia Leung, Gabor Gurbacs |
| Companies | HashKey Group, UBS, Securities and Futures Commission, Hong Kong Monetary Authority, VanEck, PointsVille, Caixin, Bitcoinist, TradingView.com, Tether |
| Currencies | Bitcoin, US Dollar, Hong Kong Dollar |
| Securities | None |
