Hong Kong regulators are expected to allow spot Bitcoin and Ether ETFs to begin trading by the end of this month, the fund issuer said.
While such funds are unlikely to welcome inflows as much as U.S. Bitcoin funds, industry insiders said they could encourage other countries to greenlight crypto ETFs.
China Asset Management, Harvest Global Investments, and Vocera International each plan to launch BTC and ETH funds in the next week or so. The move followed reports earlier this month that the Securities and Futures Commission (SFC) had informally approved such ETFs.
read more: Crypto ETF activity in Hong Kong could prompt other Asian regulators to take action
Analysts at Bloomberg Intelligence said the first six SFC-approved crypto funds are expected to attract roughly $1 billion in inflows in the first one to two years after they hit the market.
China Asset Management announced in a news release on Wednesday that it plans to launch a Bitcoin and Ether fund on the Hong Kong Stock Exchange (HKEX) on April 30th.
Thomas Zhu, head of the firm's digital assets and family office business, noted that ETF adoption is increasing across different types of allocators.
“Spot Bitcoin and Ether ETFs provide retail and institutional investors with a safe, efficient and convenient means to invest in virtual assets within a regulated framework,” he added. . “The physical feature is appealing to coin holders in that they can easily convert their coins into fully regulated ETFs managed by professional fund managers and regulated custodians.”
Rival Harvest Global Investments also said it plans to list spot BTC and ETH ETFs “by the end of April,” according to a release Wednesday.
“This will not only meet the demand for high-growth assets, but also allow investors to directly participate in the rapidly evolving blockchain and digital asset opportunities, providing further opportunities to tap into the AI-driven technology world of the future.” We will be provided with another key,” said Harvest CEO Han Tongli. statement.
Vocera International announced last week that it intends to launch a Bitcoin and Ether ETF in collaboration with Hashkey Capital. A company spokesperson did not respond to a request for comment.
The six funds proposed by the three fund groups were posted on the SFC's website on Wednesday, but representatives of the regulator had not commented at press time.
What is the impact?
Hong Kong's approval of these ETFs comes a little more than three months after the Securities and Exchange Commission allowed the first spot Bitcoin ETF to begin trading in the United States.
These 11 funds have recorded positive net inflows of $12.4 billion to date.
Bloomberg Intelligence analysts said in a webinar on Wednesday that Hong Kong's new crypto products are expected to receive about $1 billion in net inflows in the first year or two.
This total projected flow is about 2% of Hong Kong's $50 billion ETF market, which dwarfs the roughly $8.5 trillion in U.S. ETF assets.
Bloomberg analysts noted that mainland Chinese investors cannot buy these ETFs.
“I think the Asian retail market likes volatility,” Bloomberg Intelligence analyst Rebecca Singh said in a webinar. “They love anything that shakes out…so I think this product would work well in Asia.”
Beyond Flow, the approval is “significant” because it could prompt other Asian regulators to act in this area, said Sebastian Cabral, a Bloomberg equity research associate.
“We think there could be some launches in the near future, perhaps in Singapore, South Korea and Japan,” Cabral said.
Hong Kong's approval of a crypto ETF follows the launch of Bitcoin funds in Canada, the United States and elsewhere, but the SEC has not yet approved a Spot Ether fund.
U.S. regulators are expected to rule on the proposed ETH ETF next month, but many industry watchers see it as unlikely to be approved then.
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