Following the approval of the first Bitcoin spot ETF in the United States, the first Bitcoin spot ETF in Asia is expected to arrive soon. Hong Kong financial institutions are accelerating the layout of virtual asset spot ETFs. According to Chinese media reports, some fund company subsidiaries have submitted relevant applications, and some that have not yet submitted applications are also speeding up preparations.
Hong Kong currently has three virtual asset futures ETFs listed. The Hong Kong Securities and Futures Commission expressed its readiness to accept authorization applications for virtual asset spot ETFs and other related funds in December last year. Harvest International recently reported that it has submitted a Bitcoin spot ETF application to the Hong Kong Securities and Futures Commission in January, becoming the first institution in Hong Kong to propose such a product.
Many institutions are seeking to issue spot ETFs. According to the China Fund News, many Hong Kong institutions are eager to seize the opportunity. After the approval of the Bitcoin spot ETF in the United States, Hong Kong financial institutions are accelerating the layout of virtual asset spot ETFs. It is reported that some fund company subsidiaries have submitted relevant applications, and some that have not yet submitted applications are also speeding up preparations.
Officials from Huaxia Fund (Hong Kong), which intends to issue spot ETFs, stated that from their perspective, futures-based virtual asset ETFs have certain limitations, and futures rollovers also incur higher costs. The report mentioned that some institutions have submitted applications for virtual asset spot ETFs. Another fund company pointed out that the US Bitcoin spot ETF is limited to cash redemption. In contrast, according to the disclosure of the Hong Kong Securities and Futures Commission, Hong Kong Bitcoin spot ETFs will adopt multiple redemption methods, including cash and physical redemption.
The representative of this fund company believes that ETFs can bring better liquidity for investors and are more convenient compared to cryptocurrency exchanges. At the same time, the more regulated pricing mechanism of ETFs can avoid price fluctuations. For the virtual asset market, spot ETFs will continue to attract funds from traditional financial markets and are expected to usher in a new growth cycle.
HashKey Group’s COO, Xiaochi Weng, revealed in January that more than 10 fund companies are actively preparing to launch spot ETFs in Hong Kong. Among them, 7 to 8 companies are already in the actual promotion stage, and multiple Hong Kong spot ETF applications are also in substantive cooperation with HashKey, striving to promote the landing of Hong Kong spot ETFs as soon as possible in the next few months.
It is worth noting that interviewed institutions generally believe that Hong Kong’s virtual asset ETF has greater development potential. In the view of these fund subsidiaries, with the continuous improvement of regulations, the increasing richness of products, and the continuous increase of participating institutions and investors, Hong Kong’s virtual asset spot ETF is expected to become an important channel for capital inflows in Asia.
At the same time, the interviewed institutions believe that the positive attitude of the Hong Kong Securities and Futures Commission towards virtual asset spot ETFs also reflects Hong Kong’s in-depth understanding and recognition of blockchain technology. This helps strengthen Hong Kong’s position as a leading digital asset center in the region, support the development of Hong Kong as the preferred ETF market in Asia, and further enhance Hong Kong’s attractiveness and competitiveness as an international financial center.
Huaxia Fund (Hong Kong) stated that the SEC’s approval of a spot Bitcoin ETF has played a role in promoting the development of related products in the Hong Kong market and provided a reference example for the Hong Kong market. However, there are certain differences in the virtual asset ecosystem and regulatory requirements between the two places. Hong Kong products need to develop a product framework suitable for Hong Kong’s regulations and investors.
Some subsidiaries of Hong Kong funds believe that the new regulations on virtual asset supervision in Hong Kong and the listing of virtual asset spot ETFs may promote proactive cooperation between the virtual asset industry and regulators, providing compliant, secure, and inclusive investment channels for overseas investors. In the long run, it may also help Hong Kong cultivate a globally competitive Web3.0 industry ecosystem.