Hong Kong’s Spot Bitcoin and Ethereum ETFs Begin Trading, Here’s All You Need to Know

It’s the dawn of a new era in Hong Kong’s financial markets as the city launched its spot crypto exchange-traded funds (ETFs) today. A total of six spot bitcoin and ether ETFs have officially debuted on the Hong Kong Stock Exchange, a testament to the region’s continuous drive towards becoming a crypto hub.

The ETFs, namely: Bosera HashKey Bitcoin ETF (3008.HK), Bosera HashKey Ether ETF (3009.HK), ChinaAMC Bitcoin ETF (3042.HK), ChinaAMC Ether ETF (3046.HK), Harvest Bitcoin Spot ETF (3439.HK) and Harvest Ether Spot ETF (3179.HK), are now listed on Hong Kong Exchanges and Clearing Ltd., or HKEX, and are now available for trading. That is, to investors within Hong Kong and even some qualified investors outside the city, except for those in the Chinese mainland, who are still restricted from investing in the products.

Coinspeaker earlier reported that Hong Kong approved the ETF applications of some asset management firms.

Hong Kong’s Spot Crypto ETFs Nothing Like the US Ones

The new institutional investment products are set to shape the investment landscape in Asia and that of the entire world. For clarity, Hong Kong is floating the world’s first spot Ether ETFs. Therefore, there are a lot of questions regarding the product, especially considering that the US SEC is yet undecided about classifying ETH as a security.

Despite the growing concerns, it appears that Hong Kong’s ETF issuers are not even the least bit bothered about the stance of the United States on the matter.

In a recent press conference, the head of custody firm OSL Digital Securities Wayne Huang noted that Hong Kong has its own regulator and need not look to the US to make its own decisions. Huang’s translated statement reads partly:

“Whether the United States defines Ethereum as a security does not affect the independent decision-making of the Hong Kong Securities Regulatory Commission.”

Furthermore, Huang spoke on how the Hong Kong Securities Regulatory Commission is the sole regulator whose responsibility it is to determine whether particular crypto assets are securities. He noted that that is unlike the US where multiple departments are speaking out at the same time.

Meanwhile, there is another key feature that sets the Hong Kong spot crypto products apart from their US counterparts. That is their in-kind feature.

According to a statement issued by HashKey earlier today, “investors can purchase the ETFs with Bitcoin or Ethereum and subsequently sell them for cash, or vice versa.” This means that holders of BTC or ETH can now seamlessly swap their assets to ETFs.

Expectations

Hong Kong previously listed three futures-based crypto ETFs in late 2022. According to the HKEX, the crypto futures ETFs, Samsung Bitcoin Futures Active ETF, CSOP Bitcoin Futures ETF, and CSOP Ether Futures ETF, have been largely successful.

In the first quarter of this year, the combined average daily turnover for the three crypto futures ETFs was HK$51.3 million (approximately $6.5 million). That represents an impressive 470% increase from HK$8.9 million a year earlier. In the same quarter, the three crypto futures ETFs also brought in a combined HK$529 million in net inflows.

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