Bitcoin and Ethereum spot ETFs may hit Hong Kong markets on Monday: Bloomberg

Major Chinese asset managers are about to launch bitcoin and ethereum exchange-traded funds (ETFs) in Hong Kong, possibly as early as Monday, Bloomberg bitcoin-ether-etf-approval-expected-as-soon-as-monday” target=”_blank” rel=”noopener noreferrer”>reported on Friday, citing anonymous sources familiar with the matter. The schedule, however, remains provisional, sources said.

Harvest Fund Management Co.'s international division and a joint venture between Bosera Asset Management (International) Co. and HashKey Capital are the two potential ETF issuers, Bloomberg sources said.

As noted, the two entities plan to launch their ETFs at the end of the month, pending approval from the Securities and Futures Commission (SFC) and finalizing listing agreements with Hong Kong Exchanges & Clearing Ltd.

The report follows news earlier this week that prominent Chinese asset managers have applied for spot bitcoin ETFs through their Hong Kong affiliates. According to Bloomberg, on April 9, the SFC granted Harvest and China Asset Management authorization to provide fund management services related to virtual assets.

Hong Kong bitcoin ETFs set to attract $25 billion

The potential approval of Hong Kong-listed spot bitcoin ETFs could unlock up to $25 billion in demand from mainland China, as qualified Chinese investors may be allowed to access funds through the Southbound Stock Connect program. bitcoin-etfs-072122082.html” target=”_blank” rel=”noopener noreferrer”>saying Matrixport in a report on Friday.

“A likely approval of Hong Kong-listed bitcoin Spot ETFs could attract several billion dollars of capital as mainland investors take advantage of the Southbound Stock Connect program, which facilitates up to RMB500 billion (540 billion of Hong Kong dollars and 70 billion Hong Kong dollars) per year in transactions. ”Matrixport said. “Depending on (potential) available capacity, this could result in up to HK$200 billion of available capacity for those Hong Kong bitcoin ETFs, or $25 billion.”

The Southbound Stock Connect program sets an annual limit of HK$540 billion for Chinese investment in Hong Kong-listed stocks. However, 360MarketIQ data shows that the quota has not been fully utilized over the past three years, leaving between HK$100 billion and HK$200 billion a year in unused capacity.

Matrixport suggested that this unused quota could go towards the bitcoin ETF if approved.

Following the debut of US spot bitcoin ETFs, global investors have viewed Hong Kong as the next hub for cryptocurrency ETFs due to the country's regulatory environment.

In late December last year, the SFC and the Hong Kong Monetary Authority (HKMA) issued new rules addressing the possibility of investment funds, brokerages and asset managers offering crypto ETFs. The move was seen as preparation for upcoming crypto ETF products.