On April 15, Hong Kong’s Securities and Futures Commission gave green light to the launch of first spot Bitcoin and Ether exchange-traded funds (ETFs). Following the approval, the asset managers must submit an application for official listing with the Hong Kong Exchanges and Clearing, resulting in the conditional authorization of three ETFs.
The approval of spot Bitcoin and Ether exchange-traded funds in Hong Kong is opening the door for the city to possibly become the first in Asia to accept cryptocurrencies as a mainstream investment option. Hong Kong could also be one of the first locations globally to approve an Ether ETF.
Three Asset Managers have been approved
With approval from the Securities and Futures Commission of Hong Kong, at least three offshore Chinese asset managers are gearing up to introduce virtual asset spot ETFs in the near future.
First two, Harvest Global Investments and a collaboration between HashKey Capital and Bosera Asset Management (International) have been granted initial ‘conditional’ approvals for spot Bitcoin and Ether exchange-traded funds (ETFs).
Harvest Global Investments CEO Han Tongli stated that the conditional approval will help Harvest Global achieve its goals of addressing the various demands of investors and encouraging innovation within the industry.
And, China AMC (HK), the Hong Kong unit of China Asset Management, declared that it had received regulatory clearance to provide virtual asset management services. The company is currently developing exchange-traded funds (ETFs) for spot Bitcoin and ether. According to ChinaAMC, resources are being actively allocated to this development. ChinaAMC's ETFs will be held in custodianship by OSL Digital Securities.
Chinese financial institutions have expressed interest in taking part in the development of cryptocurrency assets in Hong Kong as a result of their recent disappointments with the performance of the Chinese equities markets.
The ETFs have been approved for these asset managers, but they haven't yet been introduced.
Hong Kong- Efforts to be a Crypto Hub
In mainland China, cryptocurrency trading is essentially banned. Meanwhile, Hong Kong is taking cryptocurrency seriously. In an effort to establish its appeal as a financial hub, the city has been establishing itself as a global hub for digital assets.
The digital assets sector is viewed by the Hong Kong government as the main driver of immigration and foreign investment in the city. City leaders aim to restore business confidence and create a more diverse digital economy by luring in top talent and foreign investment. Digital asset licensing has made it possible to establish dominant crypto companies headquartered in Hong Kong.
But Hong Kong has been progressively trying to position itself as a regulated cryptocurrency hub in order to compete with other financial hubs like Dubai and Singapore.
US Launches ETFs
The decision by Hong Kong to approve Bitcoin exchange-traded funds (ETFs) comes soon after the US introduced comparable ETFs, which have already drawn a sizable capital inflow of about $12 billion.
Ten spot Bitcoin ETFs were approved on January 11 in the United States. Since then, these products have gained popularity; according to CoinGecko data, their assets under management have surpassed $56.2 billion, helping to push Bitcoin to an all-time high of $73,737.94 in March.
Without requiring direct ownership of the cryptocurrency, Bitcoin ETFs provide investors with exposure to changes in its value. Analysts anticipate that ETFs will broaden access to the crypto market for a wider range of traditional investors.
Well-known Bitcoin ETFs, Fidelity's FBTC and BlackRock's IBIT, are among the top-performing 0.1% of the roughly 5,500 ETFs introduced in the previous 30 years, according to Bloomberg data. This year, Bitcoin has increased in value by more than 50%. It was trading at about $66,000 as of Monday.
(Inputs fromReuters)
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