Hong Kong Greenlights BTC and ETH Spot ETFs, Yet There is a Catch
Harvest Fund Management, Bosera Asset Management, and China Asset Management have secured approval from the Hong Kong regulator to launch spot ETFs for Bitcoin and Ethereum.
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Harvest Fund Management, Bosera Asset Management, and China Asset Management have secured approval from the Hong Kong regulator to launch spot ETFs for Bitcoin and Ethereum.
These ETFs may allow for the creation and redemption of shares in a physical form, meaning they can be issued in exchange for bitcoins and redeemed back for bitcoins as well. In the spot Bitcoin ETFs launched in the US, this action is only feasible using fiat currency.
Bloomberg’s senior ETF analyst, Eric Balchunas, commented on the newly approved spot cryptocurrency ETFs in Hong Kong, suggesting they are unlikely to attract massive billion-dollar inflows.
Among the constraining factors are:
- The niche scale of the Hong Kong ETF market, alongside the restrictions preventing purchases by mainland Chinese.
- The issuers who secured approval are relatively minor. Industry heavyweights like BlackRock are still on the sidelines.
- Less liquid and efficient base ecosystem that could lead to broader spreads.
- Furthermore, these ETFs are expected to incur fees between 1-2%, significantly higher than those of American spot Bitcoin ETFs.
Balchunas also noted that the ETFs might launch next week, strategically timed to not overlap with the industry conference in Dubai.
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