Spot Bitcoin And Crypto ETFs Set To Launch In Hong Kong
A number of asset management companies in Hong Kong are preparing to launch spot Bitcoin and crypto Exchange-Traded Funds (ETFs), according to Livio Weng, the Chief Operating Officer (COO) of HashKey Group. Weng revealed in an interview with Chinese local media outlet Caixin that seven to eight companies are in the “advanced stages” of launching these ETFs. This indicates that not only Bitcoin but also altcoins could be offered as spot ETFs in Hong Kong.
This development positions Hong Kong as a leader in the Asian market, as it will be the first to allow the listing of virtual asset spot ETFs. The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) have played key roles in facilitating this progress.
In December 2023, the SFC and HKMA issued a circular expressing their readiness to consider applications for the authorization of virtual asset spot ETFs. This represents a significant shift from the SFC’s previous regulatory stance, which limited crypto investments to professional investors only.
Hong Kong Set To Allow “In-Kind” As Well
In addition to spot ETFs, Hong Kong’s financial regulator has set guidelines for approving ETFs using both “in-kind” and “cash creates” models. This approach differs from the cash-based strategy employed by regulators in the United States.
The “in-kind” ETF approach allows investors to exchange their existing assets for shares in the ETF, and vice versa. This enables seamless transitions between Bitcoin and ETF shares, making it appealing for those who already hold Bitcoin and want to diversify their portfolios without converting to traditional currencies.
Gabor Gurbacs, founder of PointsVille and advisor to Tether and VanEck, commented on the competition in the Bitcoin ETF market between Eastern and Western nations. He highlighted the significance of China’s approval in Hong Kong’s decision to launch Bitcoin ETFs, suggesting that China is determined to compete in the institutional Bitcoin space.
Hot Take: Hong Kong’s Move Strengthens BTC and Crypto Demand
The launch of spot Bitcoin and crypto ETFs in Hong Kong has the potential to further strengthen the demand for BTC and cryptocurrencies. This development will likely attract more institutional and retail investors to enter the market. As of now, BTC is trading at $45,243.
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