Hong Kong Assumes Crypto Leadership with Bitcoin & Ethereum ETFs; USA Left Behind?

Published by

Zameer Attar

April 15, 2024

Hong Kong has recently given the go-ahead to several ETFs (exchange-traded funds) tracking the spot prices of Bitcoin (BTC) and Ethereum (ETH). This regulatory approval is a big deal for Hong Kong, showing its determination to become a major player in the world of cryptocurrency finance and setting itself apart from China’s strict crypto rules.

After these approvals, Bitcoin (BTC) quickly recovered from a recent dip on April 14th. Despite geopolitical tensions, it surged back from over $70,000 to settle around $61,000. Parth Chaturvedi of CoinSwitch Ventures sees these Spot ETFs as a way to open up crypto investment to more people, attracting newbies to the financial world.

He predicts a big wave of investment into Hong Kong’s crypto market.

Spotlight on Ether ETFs

The preliminary approval of spot Ether ETFs in Hong Kong has caught the attention of many, including Gary Tiu from OSL. He notes that Hong Kong has beaten the United States to the punch in this area, as the US hasn’t approved any spot Ether products yet. Angela Ang, a former regulator at the Monetary Authority of Singapore, sees this as a crucial move for Hong Kong’s crypto ambitions, noting the growing interest in Ethereum.

Ready to Launch!

With the in-principle approval from the Hong Kong Securities and Futures Commission (SFC), these ETFs are almost ready for their public debut. However, there are still some technical details to iron out before they officially launch.

Upcoming ETFs from Bosera Asset Management and HashKey Capital will offer in-kind subscription and redemption options, allowing direct use of Bitcoin and Ether. Tiu emphasizes the significant support needed for this feature, especially in the retail fund space. Similar to the US, where the approval of spot Bitcoin ETFs sparked a fee war, Tiu expects a competitive landscape in Hong Kong.

Future Prospects

There’s speculation about mainland Chinese investors showing interest through the Southbound Stock Connect program. However, mainland investors can’t access these ETFs through this program yet. Despite this, there’s optimism for potential inclusion in the future.

Also read: Hong Kong Sees 10 Financial Institutions Apply For Spot Bitcoin and Ethereum ETFs

Zameer Attar

Zameer is a financial analyst and writer with a particular interest in cryptocurrency markets. He has been studying cryptocurrencies and their market behavior for several years and deeply understands the factors that affect the price of cryptocurrencies. His expertise lies in his ability to use both technical and fundamental analysis to make informed predictions about the future direction of cryptocurrency prices. He has a strong understanding of market sentiment and uses this to inform his trading decisions and price predictions.