Our weekly roundup of news from East Asia curates the industry’s most important developments.
Hong Kong’s new Bitcoin and Ether ETFs
Hong Kong’s Securities & Futures Commission has approved spot Bitcoin and Ether ETFs.
But will they unlock a river of gold from Asian investors, or will they simply be a blip on the radar of the finance world?
Social media pricked up its ears at the news that Hong Kong offshoots of Chinese asset managers Harvest Fund Management, Bosera Asset Management, and China Asset Management (ChinaAMC) are among the first to kickstart their crypto asset ETFs.
Bosera will launch its spot crypto ETFs in collaboration with Hong Kong-based HashKey Capital. OSL Digital Securities, a licensed digital asset platform in Hong Kong, will act as the sub-custodian for both ChinaAMC and Harvest. Unlike their United States counterparts, Hong Kong crypto ETFs can settle both in fiat money and in-kind, allowing users to redeem their ETF assets directly for Bitcoin and Ether.
“This mechanism enhances market liquidity by allowing the direct exchange of the asset for ETF shares, reducing reliance on cash settlements and facilitating uninterrupted trading flows,” said Patrick Pan, CEO and chairman of OSL.
The Stock Exchange of Hong Kong needs about two weeks to finalize listing procedures and other arrangements after the SFC’s approval.
On April 18, local fintech firm Eddid Financial became the third approved securities firm for crypto ETF trading services. Specifically, Eddid Financial will provide virtual asset trading and product distribution services to general retail investors and facilitate the creation and redemption of crypto ETF units.
While there are wild predictions the new ETFs could unlock up to $25 billion worth of inflows, not everyone is bullish.
“Mainland China investors probably won’t be eligible to buy Hong Kong-listed spot Bitcoin and Ether ETFs as they are barred from buying virtual assets,” commented Bloomberg ETF analyst Eric Balchunas.
Currently, there exists a $50,000 annual cap for Chinese residents to…
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