Hong Kong Takes Lead in Crypto with Bitcoin & Ethereum ETFs; Is the USA Falling Behind?
Hong Kong has given its approval for several Exchange-Traded Funds (ETFs) that track the spot prices of Bitcoin (BTC) and Ethereum (ETH), solidifying its position as a leading cryptocurrency hub and diverging from China’s strict crypto regulations. This regulatory approval is a significant milestone for Hong Kong, as it demonstrates its determination to become a major player in the world of cryptocurrency finance and sets itself apart from China’s strict crypto rules.
The approval of these ETFs has had a positive impact on Bitcoin (BTC), which quickly recovered from a recent dip on April 14th. Despite geopolitical tensions, the price surged back from over $70,000 to settle around $61,000. Parth Chaturvedi of CoinSwitch Ventures believes that these Spot ETFs will make crypto investment more accessible to a wider audience, attracting newcomers to the financial world. He predicts a significant influx of investment into Hong Kong’s crypto market.
The preliminary approval of spot Ether ETFs in Hong Kong has also garnered attention. Gary Tiu from OSL points out that Hong Kong has beaten the United States to the punch in this area, as the US has not yet approved any spot Ether products. 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.
With the in-principle approval from the Hong Kong Securities and Futures Commission (SFC), these ETFs are almost ready for their public launch. However, there are still some technical details to be sorted out before they can officially debut. Bosera Asset Management and HashKey Capital are planning to offer in-kind subscription and redemption options for their upcoming ETFs, enabling 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.
There is speculation that mainland Chinese investors may show interest in these ETFs through the Southbound Stock Connect program. However, at present, mainland investors cannot access these ETFs through this program. Despite this limitation, there is optimism for potential inclusion in the future.
In conclusion, Hong Kong’s approval of Bitcoin and Ethereum ETFs marks a significant milestone for the region, solidifying its position as a crypto hub and showcasing its commitment to becoming a major player in the world of cryptocurrency finance. These ETFs have the potential to make crypto investing more accessible and attract significant investments to Hong Kong. While there are still some technical details to be finalized, the future prospects for these ETFs look promising.