Hong Kong recently gave the green light to several exchange-traded funds (ETFs) that track the spot prices of Bitcoin (BTC) and Ethereum (ETH). This regulatory approval is a major milestone for Hong Kong, demonstrating its determination to become a major player in the world of crypto finance and setting it apart from China's strict crypto regulations.
Following these approvals, Bitcoin (BTC) quickly recovered from its recent decline on April 14th. Despite geopolitical tensions, the stock rebounded sharply from above $70,000 and settled around $61,000. Parth Chaturvedi of CoinSwitch Ventures sees these spot ETFs as a way to open the door to crypto investing for more people and attract newcomers to the world of finance.
He predicts there will be a big wave of investment in Hong Kong's crypto market.
Focus on Ether ETF
The preliminary approval of the Spot Ether ETF in Hong Kong caught the attention of many, including Gary Tiu of OSL. He pointed out that the US has not yet approved SpotEther products, giving Hong Kong a clear advantage over the US in this field. Angela Ang, a former regulator at the Monetary Authority of Singapore, points to the growing interest in Ethereum and sees this as an important move for Hong Kong's crypto ambitions.
Ready to start!
Following in-principle approval from the Hong Kong Securities and Futures Commission (SFC), these ETFs are almost ready for public launch. However, there are still some technical details to iron out before it is officially released.
The upcoming ETF from Vocera Asset Management and Hashkey Capital will offer in-kind subscription and redemption options, allowing direct use of Bitcoin and Ether. Tiu emphasizes that this capability requires significant support, especially in the retail fund space. Similar to the US, where the approval of a spot Bitcoin ETF sparked a fee war, Tiu expects a competitive environment in Hong Kong.
Future prospects
There is speculation that mainland Chinese investors may be interested through the Southbound Stock Connect program. However, mainland investors cannot yet access these ETFs through this program. Nevertheless, there is optimism about its potential for adoption in the future.
Also read: Hong Kong, 10 financial institutions apply for Bitcoin and Ethereum spot ETF
