Hong Kong’s Securities and Futures Commission (SFC) has officially announced the approval of the first batch of Bitcoin and Ethereum spot ETFs, and they are set to start trading in Hong Kong on April 30th. As Hong Kong has always been a financial hub in Asia, this ETF approval brings new momentum to the cryptocurrency market.
ETF stands for Exchange Traded Funds, which are funds that track major indices or bond market indices. Cryptocurrency spot ETFs, on the other hand, directly track the spot prices of Bitcoin and Ethereum. In simple terms, this lowers investment barriers, allowing investors to participate in the cryptocurrency market and make investments through ETFs.
According to the official announcement on the SFC website, the first batch of ETFs includes spot Bitcoin and spot Ethereum ETF products applied by Huaxia (Hong Kong), CSOP International, and HashKey Asset Management. These ETFs were approved on April 23rd and are expected to start trading on the Hong Kong Stock Exchange on April 30th.
Huaxia Bitcoin ETF
Huaxia Ethereum ETF
HashKey Bitcoin ETF by HashKey Asset Management
HashKey Ethereum ETF by HashKey Asset Management
CSOP Bitcoin Spot ETF
CSOP Ethereum Spot ETF
This is the first time such products are introduced in the Asian market, with spot Ethereum ETF being the first of its kind globally. These spot cryptocurrency ETFs are more regulated and listed on traditional exchanges, managed by professional fund companies, providing retail investors and institutions with safer and more convenient ways to invest in cryptocurrencies.
It is worth noting that unlike the “cash mode” of the Bitcoin spot ETF in the United States, the ETFs in Hong Kong adopt a “physical redemption mechanism”, allowing investors to directly use Bitcoin or Ethereum for subscription and redemption. This not only enhances investment flexibility and market transparency but also provides investors with more diverse opportunities for digital asset investments.
Experts’ views:
Eric Balchunas, an ETF analyst at Bloomberg Intelligence, stated on the social platform X that the average expense ratios for these funds are lower than the previous expectations, at 30 basis points, 60 basis points, and 99 basis points, respectively.
James Seyffart, another ETF analyst at Bloomberg Intelligence, also pointed out that there is a “fee war” going on among issuers. Prior to its launch, CSOP announced a full fee waiver, with the lowest fee reduced to 0.3%, lower than the 0.6% management fee of HashKey Asset Management and the 0.99% management fee of Huaxia Fund.
HashKey Asset Management also released a document stating that the management fees for “HashKey Bitcoin ETF” and “HashKey Ethereum ETF” will be temporarily waived from April 30th to August 31st this year to attract more users.
After the approval of the Bitcoin spot ETF by US regulatory agencies, the investor base for Bitcoin expanded and it gained dominance in the cryptocurrency market. With the support of global asset management giant BlackRock, these funds have accumulated net inflows of over 12 billion US dollars, helping Bitcoin reach a historical high of over 73,000 US dollars.
Although the cryptocurrency spot ETFs listed in Hong Kong may make it easier for global investors to access cryptocurrency assets, Vetle Lunde, a senior analyst at K33 Research, believes that the impact may not be as significant as in the United States, as the scale of fund flows is still smaller compared to the United States.
For example, according to the website of a Chinese asset management company, as of the end of last year, Huaxia (Hong Kong) had assets under management of only 266 billion US dollars, while CSOP Global had assets under management of 207 billion US dollars. Compared to BlackRock’s 9.1 trillion US dollars under management and Franklin Templeton’s 1.64 trillion US dollars, there is indeed a significant gap.
However, with the official listing of Bitcoin and Ethereum ETFs in Hong Kong, it will still bring new opportunities and momentum to the cryptocurrency market in Asia. Hong Kong’s position as a financial center in Asia will be further consolidated and will also attract more investors and capital inflows into the cryptocurrency market.
References:
coindesk, cointelegraph