The wait is finally over for Hong Kong investors today, as the first batch of ETFs that invest directly in Bitcoin and Ethereum started trading in Hong Kong. Some reports are bullish that it will surpass the launch of a $125 million US Bitcoin ETF. The demand for these funds serves as an indicator of whether the city's efforts to establish a highly regulated digital asset hub are gaining momentum.
This news caused the Bitcoin price to rise by 2% and is trading at the $63,700 level at the time of writing.
Start of operation of Hong Kong Bitcoin ETF
Harvest Global Investments, a local branch of China Asset Management, has introduced Bitcoin and Ether ETFs in the city in collaboration with Hashkey Capital and Vocera Asset Management (International). .
Bloomberg Intelligence's Rebecca Shin estimates that Hong Kong's Bitcoin and Ether funds could accumulate $1 billion over two years. However, Harvest Global CEO Han Tongli believes this forecast is too conservative. He points out that unlike the United States, which primarily targets Western investors, Hong Kong's financial products and services are accepted by both Western and Eastern investors.
Potential sources of inflows into Hong Kong goods include Chinese wealth held in Hong Kong, as well as activity from crypto exchanges and market makers in the Asia-Pacific region. While the US Bitcoin ETF has a single cash redemption model, the Hong Kong Bitcoin ETF employs a unique redemption mechanism, allowing exchange of fund units for the underlying asset and vice versa. .
Expanding offering of virtual currency ETFs
The Hong Kong Stock Exchange has signaled its opening to a wider range of crypto exchange traded funds (ETFs) as Hong Kong's first spot Bitcoin and Ether products become available. Brian Roberts, head of equity product development at Hong Kong Exchanges and Clearing Ltd., said in an interview with Bloomberg:
“We can continue to work on physical spot assets, perhaps mixed-type products, and eventually perhaps move into leveraged and inverse strategies.”
According to Roberts, the top priority is to monitor the progress and growth of recent launches before considering additional opportunities in the future.
In response to a question about the possibility of a new spot ETF being included in a program that allows mainland Chinese investors to purchase certain products in Hong Kong, Roberts said such a possibility could be considered in the future. He said that there is a sex.
