April 26, 2024
By Sharan Kaur Phillora
Hong Kong is gearing up to launch its first-ever Bitcoin and Ethereum exchange-traded funds (ETFs) on April 30. This significant development follows the green light from the Securities and Futures Commission (SFC), as reported by Bloomberg.
Here’s what we know:
Managed by Bosera-HashKey Capital and China Asset Management (ChinaAMC), these ETFs will offer a regulated platform for investing in cryptocurrencies, targeting both retail and institutional investors. In a notable divergence from practices in the United States, these ETFs will implement an in-kind creation model. This method enables the direct exchange of cryptocurrencies for ETF shares.
The move to introduce these ETFs is part of Hong Kong’s broader strategy to establish itself as a leading hub for digital assets. This initiative is set to capitalize on the growing global interest in cryptocurrencies, sparked by similar launches in other major economies like the U.S.
In the U.S., the launch of spot Bitcoin ETFs earlier this year catalyzed a record-breaking increase in Bitcoin prices, which soared to a new all-time high of US$73,737. However, recent trading saw Bitcoin at US$65,044, marking a 2.5% decline, and Ethereum dropped by 1.4% to US$3,182, according to recent CoinGecko data.
Hong Kong’s upcoming ETFs are part of a broader release, with six digital asset investment products set to debut. Approved earlier in April by the SFC, these ETFs will transition from approval to trading in just 15 days.
The ETFs’ launch coincides with ongoing regulatory developments in the U.S., where the Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs in 2024. However, a spot Ethereum ETF has yet to be approved in the U.S., signaling potential challenges and market anticipation.
As these ETFs make their debut, they are expected to spur competition among providers to lower fees, potentially enhancing the attractiveness of cryptocurrency investments. The presence of these new investment options in Hong Kong is projected to significantly impact the cryptocurrency market dynamics in the region.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.
