Hong Kong SFC Approves Spot Bitcoin and Ethereum ETFs

Exciting news as the Hong Kong regulator, the Securities and Futures Commission (SFC), has given the green light to the Spot Bitcoin ETF and Ethereum ETF. 

According to the planned sequence of events, the Hong Kong SFC has approved the trading of spot Bitcoin ETFs and spot Ethereum ETFs in the region. Hong Kong is leading the way by becoming the first jurisdiction in Asia to issue a spot Ethereum ETF; the country now follows the US in approving this product. 

Major Firms Now Bitcoin ETF Issuers

According to a local news publication, this approval is a major milestone for Hong Kong as top firms like China Asset Management, Bosera Capital and HashKey Capital Limited have been endorsed by the Hong Kong regulator to launch Bitcoin and Ethereum ETFs. 

The potential benefit of these Bitcoin and Ethereum ETF approvals is that they will provide investors with a more accessible and regulated way to invest in the underlying cryptocurrencies. It will allow them to gain exposure to these cryptocurrencies without directly owning them. 

Additionally, ETFs can offer liquidity and diversification, making it easier for investors to manage their portfolios. Harvest Global Investment plans to invest in the top digital asset spot ETFs using OSL Digital Securities Co., Ltd.  

It is the very first digital asset platform in Hong Kong that’s licensed and insured by the SFC.

Spot Bitcoin ETF To Tackle Margin Issues

This move will help tackle issues like high margin requirements, price premiums, and rollovers caused by the lack of short positions. It’s also a solution to problems like warehouse losses and will provide a more accurate real-time value of Bitcoin. This shows that the digital asset investment landscape is expanding. 

Han Tongli, the CEO and CIO of Harvest International noted that the approval of Harvest’s investment in two major digital asset spot ETF products reflects their continuous leadership and innovation in the field of blockchain assets and AI investment.

Will Mainland China Investors Gain Access?

Mainland China has put a ban on cryptocurrencies, which means it’s not very likely that they’ll be able to invest in the Bitcoin and Ethereum ETFs listed in Hong Kong. 

The regulations in place prevent funds from mainland China from being deployed in crypto-related investments including Bitcoin ETFs. ETF issuers in Hong Kong have shattered the illusions surrounding Chinese investors’ participation in the Southbound Stock Connect program, revealing that digital currency products are not included due to China’s conservative stance on cryptocurrency risk.

In all, the Hong Kong variant will help complement the US counterpart which has recorded over $200 billion in Assets Under Management (AUM).