Recent reports from local media in Hong Kong indicate that ten financial institutions are gearing up to apply for the launch of Bitcoin spot ETFs in the region.
The Hong Kong Bitcoin move comes at a crucial time, with Bitcoin spot ETFs gaining significant traction in the United States and Hong Kong seeking the opportunity to transform from a follower to a leader in the global digital asset market.
US Spot ETFs Leave Asian Investors in FOMO
In the United States, the Securities and Exchange Commission (SEC)-approved Bitcoin spot ETFs have already attracted a substantial net inflow of funds exceeding $9.5 billion within the 40 trading days since the launch. This surge in interest has fueled bitcoin’s continuous price surge, recently reaching a staggering $70,000.
While Hong Kong opened applications for Bitcoin spot ETFs in December 2023, related products are yet to be listed. According to the local reports, industry insiders express concerns about Asian investors being exposed to the risk of a delayed entry into the US-driven market.
HashKey Exchange’s CEO and COO, Weng Xiaoqi, acknowledges the influence of US Bitcoin spot ETFs on the digital asset trading market and emphasizes the need for relevant products in Asia. He stated:
“Hashkey believes that Hong Kong, as an established global financial center, will attract a lot of funds once the Bitcoin spot ETF transaction is opened.”
Hong Kong Bitcoin ETFs: 10 Active Fund Managers
It is interesting to note that the heightened interest in Bitcoin spot ETFs has triggered a surge in Hong Kong’s Bitcoin futures ETFs. The Southern Bitcoin ETF and the Samsung Bitcoin ETF have experienced significant increases, rising by 27.5 yuan and 26.8 yuan last week, respectively.
Xiaoqi revealed that around ten fund managers, comprising those with Chinese funding and others from Asia and Europe, are actively considering the introduction of spot-digital-asset ETFs in Hong Kong.
Notably, seven or eight of these managers have initiated discussions with the Securities and Futures Commission of Hong Kong and have collaboratively established a team to begin developing these investment products.
As BitcoinNews reported, later in January, Harvest Hong Kong, a major Chinese fund manager, submitted the first application for a spot ETF with the country’s Securities and Futures Commission (SFC).
A More Centralized Liquidity Approach
While the first batch of ten Bitcoin spot ETFs in Hong Kong awaits approval from the China Securities Regulatory Commission (CSRC), industry experts anticipate a number likely less than the eleven approved in the United States. They believe that a more centralized liquidity approach, restricting the number of listed spot ETFs in Bitcoin, will be favorable for Hong Kong’s development.
In a December circular, the SFC specified that transactions involving digital assets within these ETFs must be conducted through SFC-licensed platforms or authorized financial institutions. Additionally, the SFC emphasizes that the fund’s trustee or custodian can only delegate custody functions to an SFC-licensed VATP or entities meeting the custody standards set by the HKMA.
As the bitcoin market continues to evolve, the developments in Hong Kong highlight the global trend of institutional interest in digital asset investment vehicles.
