SPOT BITCOIN AND ETHER ETFs GET GREEN LIGHT IN HK
Conditional approval allows the four applicants to move forward with preparations to offer the funds for trading on the city’s stock exchange
Hong Kong has approved the launch of exchange-traded funds (ETF) that invest directly in bitcoin and ether, the world’s two largest cryptocurrency tokens, as the city looks to secure a leading position in the volatile virtual asset sector.
Mainland fund house Bosera Asset Management’s overseas arm and Hong Kong virtual asset firm HashKey Capital received “conditional approval” from the Securities and Futures Commission (SFC) to jointly launch spot cryptocurrency ETFs, they said in announcements published online yesterday.
Fund managers Harvest International and China Asset Management are also among those to receive the green light, according to mainland media outlet Caixin.
China Asset Management announced it was working on those ETF products after receiving SFC approval to provide virtual asset management services.
The commission, which first published rules for allowing spot cryptocurrency ETFs in December, was widely expected to approve spot bitcoin ETFs this week.
The inclusion of ether makes Hong Kong the first market in Asia and the first global finance hub to approve such a product. The US Securities and Exchange Commission in January approved spot bitcoin ETFs but has delayed a decision on ether products.
The SFC has not made any announcement on the ETFs, as none have been officially approved yet. The conditional approval allows applicants to move forward with preparations to offer the funds, such as applying to Hong Kong Exchanges and Clearing (HKEX) to offer them on the bourse.
“The SFC issues a conditional authorisation letter to an ETF application if it generally satisfies our requirements, subject to various conditions, including fee payments, filing of documents and HKEX’s listing approval,” it said in a statement without clarifying the status of any spot cryptocurrency ETF applications.
Spot cryptocurrency ETFs are considered a boon for investors who want exposure to such assets without needing to worry about setting up their own blockchain wallets or other technical details. ETFs can also be included in products like retirement funds, making them more appealing to mainstream investors.
Since the United States started allowing spot bitcoin ETFs this year, they have seen more than US$200 billion in trading volume, according to cryptocurrency news and data outlet The Block.
Bitcoin’s price has been surging since late last year, and especially after the US ETF approval in January. However, it has fallen by about 8 per cent in the past week to around US$66,700. After approving the spot fund, SEC chair Gary Gensler warned bitcoin remained a “speculative, volatile asset”.
The commission has repeatedly delayed making a decision on ETFs that directly invest in ether, the native token of the Ethereum blockchain. It is expected to conclude its review late next month.