Our weekly compilation of updates from East Asia brings together the sector’s most significant advancements.
The debut of Bitcoin and Ether ETFs in Hong Kong
The Securities & Futures Commission in Hong Kong has given the green light to spot-based Bitcoin and Ether ETFs.
However, will these ETFs tap into a lucrative market in Asia, or will they merely make a minor splash in the financial landscape?
The announcement that Hong Kong subsidiaries of Chinese investment firms Harvest Fund Management, Bosera Asset Management, and China Asset Management (ChinaAMC) are among the frontrunners in launching their cryptocurrency ETFs drew attention on social media.
Bosera, in partnership with HashKey Capital based in Hong Kong, will be introducing its spot-based digital asset ETFs. OSL Digital Securities, a licensed digital asset platform in Hong Kong, will provide sub-custodian services for both ChinaAMC and Harvest. In contrast to their counterparts in the United States, the Hong Kong digital asset ETFs can settle in both fiat currency and crypto assets, enabling investors to directly redeem their ETF holdings for Bitcoin and Ether.
“This framework enhances market liquidity by permitting the direct exchange of the asset for ETF shares, lessening the dependence on cash settlements and streamlining trading activities,” explained Patrick Pan, CEO and chairman of OSL.
The Stock Exchange of Hong Kong will require approximately a fortnight to complete the listing procedures and other formalities following the approval from the SFC.
On April 18, the local financial technology company Eddid Financial became the third licensed securities firm to offer services for trading crypto ETFs. Specifically, Eddid Financial will facilitate virtual asset trading and product distribution services for the general retail investor base, along with coordinating the creation and redemption of crypto ETF units.
While there are bold speculations that the new ETFs could attract around $25 billion in investment, not all are optimistic.
“Investors from Mainland China may not be eligible to invest in Hong Kong-listed spot Bitcoin and Ether ETFs due to restrictions on virtual asset purchases,” observed Bloomberg ETF…
..
