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Hong Kong Poised to Launch Asia's First Spot Bitcoin ETFs in April

Hong Kong to introduce Asia's first spot Bitcoin ETFs, setting a new benchmark in cryptocurrency investment.

Thu, 11 Apr 2024, 09:52 am UTC

Hong Kong is set to approve its first spot bitcoin exchange-traded funds (ETFs) this month, marking a significant move to bolster its position as a global financial hub amid challenges. Insiders report that the city could become the first in Asia to offer these ETFs, attracting global investment and advancing cryptocurrency adoption.

Hong Kong Accelerates Spot Bitcoin ETF Approval, Aiming to Revitalize Financial Hub Status

That timeline would make Hong Kong Asia's first city to offer the popular ETFs, and it is significantly faster than industry expectations of a launch later this year, per MSN.

According to one source, regulators have accelerated the approval process.

After losing much of its luster as a global financial hub due to pandemic restrictions, China's faltering economy, and Sino-U.S. tensions, Hong Kong authorities have been eager to do everything possible to increase the city's attractiveness for financial trading.

"The significance of Hong Kong ETFs is far-reaching as it could bring in fresh global investment as well as pushing crypto adoption to a new height," said Adrian Wang, CEO of Metalpha, a Hong Kong-based crypto wealth manager.

In January, the United States launched the first US-listed exchange-traded funds (ETFs) to track spot bitcoin, generating approximately $12 billion in net inflows, according to BitMEX Research. Bitcoin is up more than 60% this year, reaching an all-time high of $73,803 in March. It was trading at around $69,000 on April 10.

Major Chinese Asset Managers Eye Hong Kong's Emerging Spot Bitcoin ETF Market

According to two sources, at least four asset managers from mainland China and Hong Kong have applied to launch the ETFs.

According to two people and a third source, the applicants include China Asset Management's Hong Kong unit, Harvest Fund Management, and Bosera Asset Management.

Reuters reports that the sources were not authorized to speak with the media and declined to be identified. The Hong Kong Securities and Futures Commission (SFC) and the three Chinese companies declined to comment.

According to the SFC's website, China Asset Management and Harvest Fund Management's Hong Kong units were approved this month to manage portfolios that include more than 10% virtual assets. Their parent companies are among China's largest mutual fund firms, each managing assets of over 1 trillion yuan ($138 billion).

Although cryptocurrency trading is prohibited in mainland China, offshore Chinese financial institutions have expressed a strong desire to participate in Hong Kong's crypto asset development.

Hong Kong approved the first ETFs for cryptocurrency futures in late 2022. The largest, the CSOP Bitcoin Futures ETF, has seen its assets under management increase sevenfold since September, reaching approximately $120 million. Hong Kong-based Value Partners has also said it is considering launching a spot Bitcoin ETF. It has yet to be stated whether it has been applied.

Photo: Microsoft Bing

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