Hong Kong’s market regulator has given the green light to the first batch of crypto-related spot exchange-traded funds (ETFs), marking a significant milestone for the city and potentially positioning it as Asia’s premier digital-asset hub. The approval by the Securities and Futures Commission (SFC) on Tuesday paves the way for spot-based bitcoin and ether ETFs offered by asset managers Harvest Global Investments, China Asset Management (ChinaAMC), and a consortium of Bosera Asset Management and HashKey Capital.
According to Bloomberg Intelligence analyst Eric Balchunas, these ETFs could commence trading as early as April 30. Interestingly, the management fees for these ETFs are lower than initially anticipated, presenting a promising outlook for investors. James Seyffart, senior ETF analyst at Bloomberg Intelligence, highlighted a possible fee competition among issuers, noting that Harvest has opted to waive all fees for the first six months. Post this initial period, Harvest will impose a 0.3% fee for both its spot BTC and ETH funds, undercutting the fees of Bosera-HashKey funds (0.6%) and ChinaAMC (0.99%).
This regulatory approval follows a landmark decision by U.S. regulators three months ago to greenlight the first spot-based bitcoin ETFs in the country. This move significantly broadened the investor base for cryptocurrencies and dominated the digital asset market narrative for months. Notably, these ETFs, spearheaded by global asset management giant BlackRock, have attracted over $12 billion in net inflows since their inception, contributing to Bitcoin’s surge to a fresh all-time high of over $73,000.
While the approval of Hong Kong-listed spot crypto ETFs represents a crucial step towards making crypto assets more accessible to traditional investors globally, analysts believe that their impact may not replicate the success of U.S.-based offerings. The issuers approved in Hong Kong are significant players regionally but are overshadowed by their U.S. counterparts, some of whom manage trillions of dollars in assets under management (AUM). For instance, China Asset Management and Harvest Global Investments had AUMs of $266 billion and $207 billion, respectively, as per their company websites at the end of last year.
