Updated on April 18, 2024: Hong Kong Bitcoin and Ethereum Spot ETFs Officially Approved; Chinese Investors May Be Unable to Purchase?
According to a recent report from Bloomberg, the Hong Kong Securities and Futures Commission is expected to approve Bitcoin and Ethereum spot ETFs by the end of April. This news has excited the Chinese cryptocurrency community and has garnered attention and discussion internationally.
On the afternoon of April 15, Harvest Global Investments, the applicant for the Hong Kong Bitcoin and Ethereum ETF, announced that the Hong Kong Securities and Futures Commission has provisionally approved their two digital asset (BTC, ETH) spot ETF products.
Harvest Global Investments stated that their future Bitcoin and Ethereum spot ETF products will be collaborating with OSL, the first licensed digital asset platform in Hong Kong. This collaboration aims to address issues such as high margin requirements, price premiums caused by short selling shortages, and roll costs, in order to more accurately reflect the real-time value of Bitcoin.
By approving the Ethereum spot ETF ahead of the United States, Hong Kong has not only achieved a historic milestone but is also expected to see more Bitcoin spot ETF products listed soon.
However, due to China’s comprehensive ban on all cryptocurrency trading and mining activities in 2021, it is still uncertain whether the Hong Kong ETF will be open for Chinese investors to purchase.
Analysts from Bloomberg Intelligence have pointed out that Chinese investors are unlikely to be able to purchase Hong Kong’s Bitcoin spot ETF.
Wu Shuo, a reporter from the Blockchain News, also reported that several issuers of Hong Kong Bitcoin ETFs revealed that investors from China are unable to purchase them through the southbound fund channel.
Furthermore, it will take some time to observe whether the Hong Kong ETF can bring in a significant amount of capital to the cryptocurrency market, similar to the US ETF.
The following is the original article from April 11, 2024:
Hong Kong Accelerates Review of Four Bitcoin Spot ETFs! Approval Expected in April
After the United States approved the Bitcoin spot ETF earlier this year, it brought a significant amount of capital to the cryptocurrency market and led to an increase in the price of Bitcoin (BTC). According to Reuters, two sources revealed that Hong Kong’s regulatory authority may approve the first batch of Bitcoin spot ETF applications next week, with trading expected to begin in April.
️ Further reading: Decoding “Bitcoin Spot ETF”! Why are 11 financial giants rushing to apply?
According to local news media Tencent Finance, the Hong Kong Securities and Futures Commission (SFC) has expedited the review of four Bitcoin spot ETFs currently under application, including Harvest Global Investments, Huaxia Fund, Bosera Fund, and Wisdom Financial.
The report pointed out that the SFC updated the list of virtual asset management funds urgently on April 10 because it plans to announce the first batch of Bitcoin spot ETFs in Hong Kong to the public on April 15. However, Bosera Fund and Wisdom Financial have not appeared in the updated list of virtual asset management funds by the SFC because these two funds do not have independent licensed responsible persons for cryptocurrency assets.
According to the Hong Kong process, after the SFC releases the first batch of Bitcoin spot ETFs, the Hong Kong Exchanges and Clearing Limited (HKEX) will need about two weeks to prepare for product listing and other matters. Due to detailed communication and planning between the Bitcoin spot ETF project and the HKEX, it is expected to be completed in approximately ten days. Tencent Finance pointed out that the SFC originally planned to list the Bitcoin spot ETF in Hong Kong around April 25, no later than the end of April.
What do experts think about the “Hong Kong version” of Bitcoin ETF?
This is something worth looking forward to for investors because they can invest in Bitcoin through ETFs, which essentially opens up the channel for retail investors to enter the cryptocurrency market.
Market analyst Noelle Acheson also stated, “This will be a big deal,” as it provides Chinese investors with a legal way to access Bitcoin.
Acheson pointed out that Chinese investors are becoming less interested in investing in domestic real estate and stocks because of existing issues in the Chinese real estate market, construction industry, and stocks. This has consequently sparked interest among investors in alternative assets such as gold. Recently, a gold-backed ETF in China experienced record-high prices and trading was eventually suspended after reaching a 30% premium.
Therefore, if the Bitcoin ETF is indeed approved in Hong Kong, it is likely that there will be a “significant influx of capital into the Bitcoin market.” Additionally, if concerns about the continuous depreciation of the Chinese yuan intensify, investment in Bitcoin will become more widespread.
Acheson suggested that Chinese authorities are likely aware that regardless of approval, most citizens will likely redirect their investments towards hard assets such as precious metals, which are unrelated to the US economy.
Vetle Lunde, a senior analyst at K33 Research, stated that while the approval of the ETF could serve as a catalyst for further Bitcoin development, the scale of capital inflows is unlikely to reach that of US ETFs.
Reference sources: Cointelegraph, CoinDesk, CoinDesk
Proofread by: Gao Jingyuan