Key Points
- Hong Kong has given the green light to the first batch of spot Bitcoin and Ethereum ETFs.
- The ETFs, managed by Bosera, ChinaAMC (HK), and Harvest Fund, will feature in-kind creation and redemption.
Hong Kong has given its approval to the first batch of spot ETFs tied to Bitcoin and Ethereum.
This move sees the region following in the footsteps of the US.
Asset Managers and ETF Features
Three asset management firms, namely Bosera, ChinaAMC (HK), and Harvest Fund, have received initial approvals.
Gary Tiu, an executive director at Hong Kong-based OSL Securities, suggested that this could give Asia an advantage over the US.
He pointed out that the US has yet to approve any spot products, which puts Hong Kong in a strong position when launching Ethereum products.
OSL has been approved as the first sub-custodian partner for ChinaAMC’s Bitcoin and Ethereum ETFs.
US vs Hong Kong ETFs
The US’s chances of approving spot Ethereum ETFs in May seem to be dwindling due to the US SEC’s silence on the filings.
However, Hong Kong’s ETFs may have an additional advantage over their US counterparts.
The ETF product from Bosera, in collaboration with HashKey Capital, will offer an “in-kind” subscription.
This means that users can subscribe directly to the ETF shares using Bitcoin or Ethereum.
Additionally, investors can redeem their shares and receive actual Bitcoin or Ethereum in return, unlike the US spot Bitcoin ETFs which only allow cash settlements on the underlying asset.
Simon Mow, an investor and crypto market commentator, highlighted this difference as an opportunity for Asia to accumulate more Bitcoin.
At the time of reporting, Bitcoin was trading at $66K, up 2.5% in the past 24 hours.
Yet, Antony Scarramucci, a Bitcoin enthusiast and former White House executive, argued that the market has not yet factored in this development.
Previously, analysts from VanEck suggested that Chinese investors were driving the recent gold accumulation and price surge.
Therefore, they view the approval of the Hong Kong ETFs as a potential catalyst for Bitcoin.
The first trading dates for the ETFs have not been disclosed, but the approvals indicate that most of the vetting process is complete.
The launch and first day of trading will occur later and are yet to be announced by the Hong Kong Securities and Futures Commission.
Gary Tiu of OSL confirmed that the approvals indicate that the launch day is imminent.
The approval of spot Ethereum ETFs positions Asia as a first-mover.
However, it remains to be seen how the overall market will react when the ETFs commence trading.
