Hong Kong Bitcoin and Ether ETF officially approved to start trading on April 30
The first wave of spot Bitcoin and Ether exchange-traded funds (ETFs) were officially approved to begin trading in Hong Kong on April 30.
Hong Kong's financial regulator, the Securities and Futures Commission (SFC), announced the official approval of the first batch of Bitcoin (BTC) and Ether (ETH) ETFs on April 24, according to a press release shared by Cointelegraph.
The first batch of Hong Kong-based ETFs also includes China Asset Management (ChinaAMC) Bitcoin and Ether-based ETFs, which will begin trading on April 30.
Thomas Zhu, head of digital assets and family office business at ChinaAMC, said ETFs offer retail and institutional investors a safer and more convenient way to invest in digital assets under a regulated framework. In the official announcement he wrote:
“The unique feature attracts coin holders by offering the ease of converting coins into fully regulated ETFs managed by professional fund managers and custodians. With the growing adoption of ETFs in institutional asset allocation and retail in Hong Kong, we expect strong demand for our offerings.
Hong Kong will launch three Bitcoin and three Ether-based spot Bitcoin ETFs on April 30 as of April 2.
Related: Hong Kong Approves First Bitcoin and Ether ETF
Unlike the US cash creation model of Bitcoin ETFs, Hong Kong aims to provide ETFs with in-kind creation models that allow them to create new ETF shares using BTC and ETH.
A Hong Kong-style ETF innovation model could be a big opportunity to increase AUM and trading volume of these products, according to a research note shared by Bloomberg ETF analyst Rebecca Sin in a March 26 X post by Eric. Balchunas:
“Hong Kong aims to create an ETF of sorts unlike the US, where trading is only cash – in the US it's cash, Bitcoin ETF out, while Hong Kong is Bitcoin in, ETF out. This could be a marketing opportunity.
Hong Kong ETFs may see a potential fee war.
The launch of the first ETFs in Hong Kong could lead to issuers racing to offer clients the lowest fees, Bloomberg ETF analyst James Seifert said on April 24. wrote:
“A potential fee war could break out over these Bitcoin and Ethereum ETFs in Hong Kong. Autumn will come after the full fee-free and minimum fee of 0.3% is removed.”
According to Eric Balchunas, senior ETF analyst at Bloomberg, in an April 24 X post, the first ETF's payout was lower than previously expected, which is a promising sign:
“Payments are 30bps, 60bps, and 99bps which is lower on average than we thought, a good sign.”
Additional reporting by Helen Partz
Related: ‘China to start auction' — Will Hong Kong's Bitcoin ETFs fuel the halving rally?
