2024-04-13
In a surprising move, Hong Kong is set to become the first city in Asia to launch spot bitcoin exchange-traded funds (ETFs).
Industry insiders predict that the first approvals for these ETFs will be announced as early as next week, much faster than anticipated.
The approval process has been expedited by regulators, signaling Hong Kong's determination to enhance its status as a global financial hub.
This development holds significant implications for both Hong Kong and the crypto market.
By attracting fresh global investment and promoting crypto adoption, the introduction of Hong Kong ETFs could elevate the city's financial trading landscape to new heights, according to Adrian Wang, CEO of Metalpha, a Hong Kong-based crypto wealth manager.
The United States paved the way for bitcoin ETFs by launching the first U.S.-listed exchange-traded funds in January.
These funds garnered approximately $12 billion in net inflows, demonstrating the growing interest in cryptocurrencies. Bitcoin itself has experienced a remarkable surge, with a 60% increase in value this year and reaching an all-time high of $73,803 in March. As of Wednesday, it was trading around $69,000.
Several mainland Chinese and Hong Kong asset managers have already submitted applications to launch ETFs in Hong Kong.
Among them are China Asset Management, Harvest Fund Management, and Bosera Asset Management, all seeking to capitalize on this emerging opportunity.
Notably, China Asset Management and Harvest Fund Management's Hong Kong units recently obtained approval to manage portfolios with over 10% investment in virtual assets.
While cryptocurrency trading is prohibited in mainland China, Chinese financial institutions based in Hong Kong are eager to participate in the development of crypto assets.
This trend was evident when Hong Kong approved its first ETFs for cryptocurrency futures in late 2022. The CSOP Bitcoin Futures ETF, the largest of its kind, has experienced a seven-fold increase in assets under management, reaching approximately $120 million.
Additionally, Value Partners, a Hong Kong-based investment management firm, has expressed its interest in exploring the launch of a spot bitcoin ETF. However, it has not yet disclosed whether it has submitted an application for approval.
Overall, the introduction of spot bitcoin ETFs in Hong Kong is poised to revolutionize the city's financial landscape and attract global investment. With the potential for increased crypto adoption, Hong Kong is firmly positioning itself as a major player in the evolving world of digital assets.
