April 18, 2024 Update: Hong Kong Bitcoin and Ethereum Spot ETFs Officially Approved, Chinese Investors Possibly Excluded?
Bloomberg reported last week that the Hong Kong Securities and Futures Commission is expected to approve Bitcoin and Ethereum spot ETFs by the end of April, sparking enthusiasm in the Chinese cryptocurrency community and drawing international attention and discussion.
At 2:00 PM today (15th), Harvest Global Investments, the applicant for the Bitcoin and Ethereum spot ETFs in Hong Kong, announced that the Securities and Futures Commission has conditionally approved their digital asset products.
Harvest Global Investments stated that their future Bitcoin and Ethereum spot ETF products will collaborate with OSL, the first licensed digital asset platform by the Hong Kong Securities and Futures Commission, to effectively address issues such as high margin requirements, price premiums due to short positions, and rolling costs, thereby accurately reflecting the real-time value of Bitcoin.
Hong Kong’s ahead-of-the-curve approval of the Ethereum spot ETF before the United States not only sets a historic milestone but also anticipates the imminent listing of more Bitcoin spot ETF products.
However, due to China’s comprehensive ban on all cryptocurrency trading and mining activities in 2021, it remains uncertain whether Hong Kong ETFs will be open to Chinese investors. Analysts from Bloomberg Intelligence indicated that Chinese investors are likely unable to purchase Hong Kong Bitcoin spot ETFs, as reported by Wu Blockchain.
Furthermore, whether Hong Kong ETFs can attract as much capital to the cryptocurrency market as their U.S. counterparts will also require further observation.
Original article from April 11, 2024:
Hong Kong Accelerates Review of Four Bitcoin Spot ETFs! Approval Likely by April
Following the U.S. approval of Bitcoin spot ETFs earlier this year, which brought significant capital to the cryptocurrency market and drove up Bitcoin (BTC) prices, Reuters reported that Hong Kong regulators may approve the first batch of Bitcoin spot ETFs next week, with trading potentially starting in April.
Extended Reading:
In-depth analysis of “Bitcoin Spot ETFs”! Why are 11 financial giants rushing to apply?
According to local news outlet Tencent Finance, the Hong Kong Securities and Futures Commission (SFC) has expedited the review of four Bitcoin spot ETF applications, including those from Harvest Global Investments, Huaxia Fund, Boshi Fund, and Wisdom Financial.
The report noted that the SFC urgently updated the list of licensed responsible persons for virtual asset management funds yesterday (10th), as it plans to announce the first batch of Hong Kong Bitcoin spot ETFs by April 15th. However, Boshi Fund and Wisdom Financial have not yet appeared on the updated list due to their lack of an independent licensed responsible person in the cryptocurrency industry.
According to Hong Kong’s procedures, after the SFC releases the first batch of Bitcoin spot ETFs, the Hong Kong Stock Exchange will need approximately two weeks to prepare for product listing and other matters. Tencent Finance pointed out that the SFC originally planned to list Bitcoin spot ETFs in Hong Kong around April 25th, at the latest by the end of April.
Expert Views on the “Hong Kong Version” Bitcoin ETF?
This is something to look forward to for investors, as they can invest in Bitcoin through ETFs, effectively opening up channels for retail investors to enter the cryptocurrency market.
Market analyst Noelle Acheson also commented, “This will be a big deal,” as it provides Chinese investors with a legal opportunity to access Bitcoin.
Acheson pointed out that Chinese investors are increasingly losing interest in domestic real estate and stocks due to issues in the Chinese real estate market, construction industry, and stocks. This has spurred investor interest in alternative assets like gold. Recently, an ETF linked to gold in China saw record-high investments, leading to a trading suspension after the asset price premium reached 30%.
Therefore, if Hong Kong indeed approves Bitcoin ETFs later on, there is likely to be a “significant influx of funds into the Bitcoin market.” Additionally, if investor concerns about continued depreciation of the Chinese yuan intensify, investment in Bitcoin is expected to become more widespread.
Acheson pointed out that Chinese authorities are likely aware that, whether approved or not, most citizens are likely to redirect their investments towards hard assets such as precious metals. Therefore, they may prefer investments unrelated to the US economy.
Senior analyst Vetle Lunde from K33 Research stated,
“While the approval of ETFs could serve as a catalyst for further Bitcoin development, the scale of capital inflows is unlikely to approach that of US ETFs.”