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  • T Masters and M Bacina

HK approves spot bitcoin and ether ETFs

On Monday, Hong Kong Securities and Futures Commission (SFC) approved the launch of spot bitcoin and ether exchange-traded funds (ETFs). Prominent asset management companies including ChinaAMC, Harvest Global and Bosera International were given the initial green light to bring these ETFs into the Hong Kong market.

Following the regulatory approval to provide ‘virtual asset management services’, fund managers have promptly commenced the works necessary for its development. ChinaAMC stated that it is ‘actively deploying resources in the development’ of a spot bitcoin and ether ETF while Harvest Global appointed OSL Digital Securities, a leading licensed digital asset platform as their sub-custodian. OSL welcomed the partnership in a statement:

We are honored to support this milestone
BTC/ETH ETFs…[are] a transformative vehicle for funnelling substantial funds and investors into the digital asset space. The direct exposure mechanism these ETFs offer simplifies investment in digital assets like Bitcoin, enhancing accessibility and market liquidity.

Bitcoin and Ether ETFs have great potential to drive global adoption of cryptocurrency, by allowing investors to be exposed to the asset class without the burden of owning the cryptocurrency directly. This will encourage more traditional and risk averse investors to enter the market.

If successfully launched, Hong Kong will be among the first jurisdictions in the world to issue a spot ether ETF. With the recent success of spot Bitcoin ETFs seeing billions of dollars in investments within a couple of months of launching, a spot ether ETF will be crucial for driving mainstream adoption of more cryptocurrencies.

While crypto remains largely banned in mainland China, Hong Kong is emerging as the next crypto hub, following the footsteps of crypto-friendly jurisdictions like Singapore and Dubai. Hong Kong’s approval follows the approval of the first spot Bitcoin ETFs in the US in January, which was welcomed by the industry. With major US banks backing Bitcoin ETFs and more jurisdictions joining the wave, this marks a turning point in the global adoption of bitcoin and ether. 

Written by Kelly Kim and Tim Masters


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