Starting from April 30, Hong Kong will initiate the trade of its inaugural batches of Bitcoin and Ether spot exchange-traded funds (ETFs). This move comes after the Securities and Futures Commission (SFC) granted approval, marking a substantial broadening of financial offerings for both individual and institutional investors in the region.
The financial authority in Hong Kong has given the green light for the initial offering of Bitcoin and Ethereum ETFs for public trading. Among the approved ETFs are those from China Asset Management, set to begin transactions on April 30.
— Christiaan (@ChristiaanDefi) April 24, 2024
On April 24, the Securities and Futures Commission introduced new ETFs featuring cryptocurrencies, signifying progress in combining traditional investments with digital assets. Notably, these ETFs include options from China Asset Management, enabling investors to effortlessly invest in cryptocurrencies using regulated channels.
Thomas Zhu, the digital assets chief at ChinaAMC, spoke about the benefits and safety of these ETFs. He emphasized the convenience of their unique in-kind trait, enabling investors to swap their cryptocurrencies for ETF shares effortlessly.
In addition, Hong Kong’s use of in-kind ETF creation models sets it apart from the cash models prevalent in the U.S. This method enables investors to swap cryptocurrencies for ETF shares directly. This could lead to increased asset management and trading volumes in the cryptocurrency sector for Hong Kong.
Competitive Pricing in the Market
The launch of these cryptocurrency ETFs is not only taking place but also stirring up competition among providers to draw in investors with affordable fees. As Eric Balchunas, an analyst at Bloomberg, points out, the starting fees are surprisingly lower than expected, ranging from 0.3% to 0.99%. This price battle could result in a “fee war,” providing more budget-friendly investment choices for the cryptocurrency ETF market.
There’s a possibility of a fee battle emerging among providers of Bitcoin and Ethereum ETFs in Hong Kong. Harvest is jumping into the fray with a complete waiver of fees, making it the most affordable option at just 0.3% after the discount. (Data from my colleagues Rebecca Sin and thetrinianalyst.)
— James Seyffart (@JSeyff) April 24, 2024
Hong Kong’s decision to ease investment in cryptocurrencies through new regulatory frameworks could substantially alter the financial industry, offering safer and controlled channels for individuals to invest in digital currencies.
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2024-04-24 19:00