Hong Kong is set to launch its 6 spot ETFs based on Bitcoin and Ethereum after approval by the Securities and Futures Commission (SFC). These ETFs, providing direct exposure to the prices of the two major cryptocurrencies for professional investors, will be available from April 30, 2024.
Spot Bitcoin and Ethereum ETFs to be available in Hong Kong in a few days
A few weeks ago, the Securities and Futures Commission (SFC) of Hong Kong, the local financial regulator, gave the green light for the listing of six spot ETFs based on Bitcoin (BTC) and Ethereum (ETH).
Unlike in the United States, where ETF approvals are exclusively limited to Bitcoin, Hong Kong has opted to allow products also linked to the second cryptocurrency in the market, Ether.
This approval could mark the beginning of a new competition between Asian and North American financial markets, especially since U.S.-based Bitcoin ETFs have generated significant trading volumes since the start of the year.
Recently, a representative from HashKey Capital, a Hong Kong-based asset manager, announced that its ETFs, developed in collaboration with Bosera Asset Management, will be listed on the stock exchange starting Tuesday, April 30, 2024.
Despite China’s historically hostile stance toward cryptocurrencies, Hong Kong seems to be taking a path opposite to the Chinese government’s policy.
Although the regulations in place in China prohibit retail investors from the mainland from participating in Hong Kong markets, the “Southbound Stock Connect” program could open access to these markets for qualified Chinese investors.
A recent report by Matrixport, a Singapore-based cryptocurrency services provider, suggests that Bitcoin and Ether spot ETFs could attract up to $25 billion in investments during 2024.
$25 Billion in investments expected in Hong Kong ETFs
Estimating $25 billion in net inflows into Hong Kong’s Bitcoin and Ethereum spot ETFs might seem exaggerated.
In fact, in the United States, Bitcoin spot ETFs recorded nearly $12.5 billion in net inflows in just three months.
If we extrapolate these figures over a year, U.S. ETFs could reach $50 billion in incoming volumes.
However, it’s crucial to note that American asset managers are significantly larger than those in China.
In comparison, Harvest Fund and China Southern Fund, two of China’s leading asset managers, each manage less than $300 billion in assets, while BlackRock alone holds over $10 trillion in assets under management.
Thus, reaching $25 billion in incoming volume for Bitcoin and Ethereum ETFs in Hong Kong seems almost unattainable.
