Lynn Johannson, Advisor, Sustainability and ESG
January 4th, 2024
Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
In a care[...]
Hong Kong to Start Trading Bitcoin and Ether ETFs April 30
Crypto ETF Launch | April 26, 2024
Hong Kong's Bitcoin and Ether ETFs to Start Trading Next Week
In a ground-breaking and strategic move, the Securities and Futures Commission of Hong Kong (SFC) approved the first batch of Bitcoin and Ether ETFs in Asia, which has been given the nod to start trading on April 30 next week for both retail and institutional investors. These ETFs are unique in that they allow for direct investments in cryptocurrencies, distinguishing Hong Kong from regions like the U.S., which has only approved derivative-based crypto ETFs (ie., trading in fiat currency). Notably, according to many sources, mainland Chinese investors will unlikely be able to participate due to China's crackdown on cryptocurrencies.
See: Hong Kong’s Crypto Exchange Registration Update
Leading financial firms such as Bosera Asset Management, ChinaAMC, Harvest Fund Management, and HashKey Capital are part of the first group that were approved to manage the Hong Kong ETFs These firms are set to start trading their ETFs on April 30, 2024, offering both local and international investors new avenues for investing in cryptocurrencies directly.
What will be the impact?
The ETFs are predicted to enhance the liquidity and trading volume in Hong Kong’s digital asset markets, potentially transforming the region into a leading crypto investment hub in Asia. Bloomberg Intelligence analysts anticipate the new Hong Kong crypto ETFs will attract approximately $1 billion in net inflows within the first one to two years or 2% of Hong Kong's $50 billion ETF market. By way of comparison, U.S. spot Bitcoin ETFs have attracted approx $12.4 billion in positive net flows since launching a few months ago. Further, a veteran analyst indicated that if mainland Chinese investors gain access, there could be as much as $25 billion flowing into these ETFs
See: “Crypto’s Back”, Stripe to Support On-Chain USDC Payments
Hong Kong has been setting the stage to be a major global crypto hub for some time including a recent push for crypto exchange licensing regime for Virtual Asset Trading Platforms (VATPs). So while the SEC debates approval of a spot Ethereum ETF in the United States, Asia via Hong Kong are ready to go and opening the flood gates, which some predicted long ago.
Conclusion
In summary, the launch of these ETFs in Hong Kong could serve as a major catalyst for crypto market growth, drawing in significant institutional and possibly retail investor interest from Asia and globally.
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