Hong Kong Crypto ETF se lansează pentru a testa obiectivul Digital-Asset Hub

• The first-ever spot Bitcoin Exchange-Traded Fund (ETF) in Hong Kong is expected to go live by the end of April but triggers comparison with a three-month-old US spot Bitcoin fund. 

• Experts find it prudent to calibrate the ETF expectations in line with the smaller financial sector of the City since it does not have the “name reputation” of BlackRock. 

Hong Kong is set to make an impression with regard to its Digital-Asset Hub ambition by closely following the footsteps of the United States to launch its first-ever spot Bitcoin Exchange-Traded Fund (ETF). As earlier revizuite by Crypto News Flash, Hong Kong’s Securities and Futures Commission (SFC) has already given the greenlight as China Asset Management (Hong Kong) in partnership with OSL Digital Securities and BOC International Prudential Trusteeship is de aşteptat to issue spot-Bitcoin and Ether ETFs by the end of April.

As expected, a comparison has been triggered with the three-month-old US spot Bitcoin Fund which stormed the market in “style” and has since attracted $56 billion in assets. 

The race for a dominant share in the US ETF market involved financial giants and multinational companies with trillions of dollars in Asset Under Management. This ignited interest and led to massive anticipation. However, the Hong Kong issuers which include Harvest Global Investments Ltd, the local unit of China Asset Management, and a partnership between HashKey Capital Ltd. and Bosera Asset Management (International) Co. are reported to lack name recognition.

According to Roger Li, co-founder of One Satoshi, a chain of stores in Hong Kong, an expectation of the ETF is required to be adjusted to fall in line with the city’s smaller financial sector since “Hong Kong doesn’t have the ‘BlackRock’ effect to call on.”

How Hong Kong’s ETF Compares with the US Fund

The US Securities and Exchange Commission (SEC) which approved direct investment in Bitcoin through ETFs is dragging its feet towards the Ether ETF approval. However, the Hong Kong counterpart has given the node for both spot Bitcoin and Ether funds.

One interesting difference is that the Hong Kong spot ETFs would have an in-kind subscription and redemption mechanism which allows the underlying asset to be swapped for an ETF unit and vice versa. This is unlike the US funds which operate on a cash redemption model. 

With the in-kind approach used by Hong Kong, Evgeny Gaevoy, co-founder of crypto liquidity provider Wintermute Trading Ltd believes that it enables greater efficiency and arbitrage opportunities. This makes it appealing to “crypto natives, market makers and digital-asset exchanges.” 

Gaevoy also spoke about the necessity of setting realistic expectations:

Setting realistic expectations for the Hong Kong ETF market is crucial, especially when considering the relatively modest size of the region’s existing futures ETFs.

Marco Lim, a managing director of crypto hedge fund MaiCapital, has disclosed to have received a lot of inquiries from Bitcoin holders. Based on his observation, the product’s approval speed took many by surprise. Interestingly, the decision is reported to have been influenced by its ambition to claim the crypto hub title, however, experts believe that its success in this regard remains an open question. Concerning the overall impact on the ETF ecosystem, BI’s Sin explained that it would take time. 

Virtual-asset ETF infrastructure will take time to develop. Once the ETF ecosystem develops, more players will be able to participate, resulting in more flows, improved prices, tighter spreads, more liquidity and cheaper fees.

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