Hong Kong Spot Bitcoin ​​ETF Could Be Launched Starting This Month: OSL

Hong Kong asset managers, including ChinaAMC and Harvest Global, will launch a spot Bitcoin exchange-traded fund as early as the end of this month, OSL confirmed to The Block today.

“The report suggests a location BTC

-4.65%
The ETF could launch in late April. ETH

-4.46%
ETFs will soon follow,” said Patrick Pan, Chairman of the Board and CEO of OSL. “All parties are working quickly to complete the process. However, the exact date has not been confirmed at this time.”

“We view the recent approval as positive in principle as it brings the industry closer to launching a spot cryptocurrency ETF,” Pan added.

fan today said Chinese-language cryptocurrency news outlet Foresight News has revealed that a spot Bitcoin ETF could be available to investors as early as the end of April.

Fan’s comments came after Hong Kong’s Securities and Futures Commission on Monday. approved in principle It is offered by several asset managers, including those managed by ChinaAMC, Harvest, Bosera, and HashKey, to offer spot Bitcoin ETFs and spot Ether ETFs. OSL will act as sub-custodian and infrastructure service provider for ETFs issued by ChinaAMC and Harvest.

ChinaAMC expects strong demand

Katie He, head of products and strategy at ChinaAMC (Hong Kong), told The Block today that there will be “significant” demand for the upcoming spot cryptocurrency ETF since only professional investors in Hong Kong have access to U.S.-listed spot ETFs. He said it could be.

He said Hong Kong-based investors will have three options for exposure to cryptocurrencies once the spot cryptocurrency ETF is launched.

“They can access spot Bitcoin from an SFC-licensed VATP or through futures-based Bitcoin or Ether ETFs, which can create efficiency issues due to the high rolling costs associated with futures contracts,” he said. I continued. “Meanwhile, only professional investors in Hong Kong have had access to US-listed spot ETFs, so the introduction of spot products in Hong Kong actually opens investment opportunities to a wider audience.”

But Bloomberg senior ETF analyst Eric Balchunas said: I threw some cold water on it In excitement. “Don’t expect much flow. We think they’ll be lucky to get $500 million.” wrote X on Monday added that the Hong Kong ETF market is “small” and “local Chinese cannot buy them, at least officially.”

Some in the cryptocurrency industry have said an upcoming Hong Kong spot cryptocurrency ETF could attract significant investor interest from mainland China. Southbound Stock Connect Program. However, this argument may be weak as the Stock Connect program does not currently allow mainland investors to invest in cryptocurrency futures ETFs.

Gary Tiu, OSL’s managing director and head of regulatory affairs. told The Block On Monday, the cryptocurrency ETF had not yet been included in the list of eligible securities for the Stock Connect program, but “I think the possibility, or at least the potential, of such inclusion is something that the market certainly likes.”

Spot features

According to He, what sets the upcoming Hong Kong spot cryptocurrency product apart from its U.S. counterpart is its spot feature. “Spot trading not only provides ease of trading by providing the convenience of converting spot Bitcoin into fully regulated spot Bitcoin ​ETFs managed by professional fund managers and regulated custodians, but also eliminates the hacking that investors face when investing. Reduces various risks, including fraud. Directly with Bitcoin.”

He explained that demand for Hong Kong spot Bitcoin and Ethereum ETFs will “depend on factors such as the level of interest in cryptocurrencies within the Hong Kong market, investor decisions about different investment options, and the macro environment.”

OSL’s Tiu said the spot function was important because it had not been done in other markets and “certainly not in the retail funding space.”

“What that means is that there are investors who are holding BTC. But they don’t want to close their BTC positions. However, they want to exchange it for another type of product, such as an ETF product or interest in a fund that tracks BTC performance. Now the channels are available to do that,” Tiu added.

Disclaimer: The Block is an independent media outlet delivering news, research and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block continues to operate independently to provide objective, impactful and timely information about the cryptocurrency industry. Below are our current financial disclosures.

© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.