In a groundbreaking development for the crypto sector in Hong Kong, Harvest Fund Hong Kong, a prominent player among China's fund companies, has taken a big step by filing for a bitcoin spot exchange-traded fund (ETF). to Hong Kong Securities and Futures Commission (SFC). This movement, exclusively reported from Chinese outlet Tencent News, represents the first of its kind in Hong Kong, signaling a significant shift in the region's approach to trading and investing in digital assets.
Chinese bitcoin Spot ETF before February 10?
Harvest Fund's filing marks a pivotal moment in Hong Kong's financial landscape, coming on the heels of the US Securities and Exchange Commission's (SEC) historic approval of the first batch of bitcoin spot ETFs. US on January 11, 2024. This US decision included the conversion of Grayscale bitcoin Trust's GBTC from a closed-end fund to a bitcoin spot ETF, as well as approving applications from Western financial giants such as BlackRock and Fidelity.
In the wake of these developments, Hong Kong's SFC is reportedly considering accelerating the approval process for the region's first bitcoin spot ETF, with plans to list it on the Hong Kong Stock Exchange shortly after the New Year. Chinese, already in February. 10. The Tencent News report suggests that the SFC may adopt a strategy similar to that of the US SEC by approving multiple spot ETF applications simultaneously, although for now, Harvest Fund remains the only applicant.
Industry insiders speculate that even with the approval of multiple spot ETFs, the dominance of large institutions in the US market, such as BlackRock and Fidelity Funds, may be reflected in Hong Kong. This expectation arises from the significant investor bases and extensive customer acquisition networks these institutions possess. For example, BlackRock's IBIT currently ranks third in size among more than 600 ETFs issued in the US last year, highlighting growing investor interest in spot ETFs over other types of ETFs.
There are also rumors of a possible operational divergence between spot ETFs in the US and Hong Kong. According to Tencent News sources, in addition to cash creation, Hong Kong spot ETFs could also offer the possibility of “in-kind” bitcoin redemptions, a feature currently not available in US spot ETFs. However, the SFC has not officially commented on this aspect.
More fund companies ready to launch?
As Bitcoinist previously reported, approximately ten Chinese asset management companies are preparing to launch bitcoin and cryptocurrency spot ETFs in Hong Kong, an indicative measure of the growing acceptance and integration of digital assets into their financial ecosystem in the region. Livio Weng, COO of HashKey Group, revealed that between seven and eight of these companies are “in advanced stages” of launching these products.
This initiative aligns with the changing regulatory stance of the SFC and the Hong Kong Monetary Authority (HKMA). In December 2023, they issued a circular expressing their openness to applications for virtual asset spot ETFs, marking a departure from their previous “professional investors only” policy established in 2018. This change reflects a broader trend towards adoption and digital asset regulation, positioning Hong Kong as a potential hub for investment and innovation in bitcoin and cryptocurrencies.
At the time of publication, btc was trading at $42,267.
Featured image created with DALL·E, chart from TradingView.com
