The measure becomes a new step by the regional authorities of the Chinese province to open up to international capital from crypto investors.
By next April 15, the Hong Kong Securities and Futures Commission will approve the first batch of Bitcoin spot ETFs. Meanwhile, the local and regional crypto community applauded the announcement, which opens the doors to an era of greater acceptance. According to Bloomberg, some firms like Harvest Fund Management already have a long way to go. In that sense, this asset management giant would be ready for its own product.
On the other hand, it was learned that the batch of exchange-traded funds that are approved will not begin trading immediately. According to Cryptonews, the date of approval and the start of operations of these products will be about two weeks apart.
This measure by the province’s financial authorities comes after the United States took the same direction. In fact, in December, the authorities began to signal that they were willing to admit these investment products to their own exchange. In this way, the province continues on its path to becoming a cryptocurrency hub, in the same way as Singapore and Dubai.
Hong Kong Bitcoin ETFs Will Be Valued at $20 Billion
The expectations for these Bitcoin spot ETFs on the Hong Kong stock market are daunting. According to financial analysts, cited by the same medium, these instruments could reach the size of $20 billion dollars. This implies a new wave of institutional capital into the cryptocurrency market.
On the other hand, it was learned that the regulatory authorities would approve a batch of about 10 stock market products. Likewise, it was highlighted that the requirements to issue these products are strict. As such, these funds must adapt to the same compliances established for mutual funds and other traditional products.
Meanwhile, regulators emphasized that leveraged exposure will not be allowed between these exchange products. Likewise, issuers have the obligation to establish relationships with approved exchanges in the region to negotiate and trade crypto assets.
It is worth noting that the Hong Kong stock exchange is no stranger to Bitcoin ETF products. In fact, three exchange-traded funds have been operating for some time, however, these are futures and not cash as expected.
As already mentioned, this new step by the regulatory authorities becomes a very positive one for the crypto market. This guarantees the entry of fresh institutional capital beyond those of Wall Street.
Incoming Hong Kong Spot Bitcoin ETFs Could Be a ‘Big Deal’, Analysts Say
“[They] will be a big problem,” said Noelle Acheson, macro analyst and author of the newsletter Crypto Is Macro Now, in an email interview with CoinDesk. “It’s not just the access to hedge funds and family offices based in the region; it’s also the access it provides to mainland investors.”
While the approval of ETFs could be an additional positive catalyst for Bitcoin, the market should not expect NEAR flows at the size seen by US spot funds, said Vetle Lunde, senior analyst at K33 Research.
The two Hong Kong-listed Bitcoin futures-based ETFs have seen “solid” growth this year, more than doubling their assets in BTC terms, he noted, but their combined size is less than 2,000 BTC, or just the 2% of US-listed ETF futures.
By Audy Castaneda
