- Hong Kong has approved the first batch of spot BTC, ETH ETFs.
- Some ETFs have in-kind creation and redemption features.
Hong Kong has followed US steps by approving crypto ETFs linked to it Bitcoin [BTC] And Ethereum [ETH].
At least three asset managers – Bosera, ChinaAMC (HK) and Harvest Fund – have received initial approval.
Interestingly, Gary Tiu, executive director of Hong Kong-based OSL Securities, noted that the approval could give Asia an edge over the US. In a recent one interviewthe director claimed,
“At this time, the US has not approved any spot products. So the Hong Kong managers are certainly in a very good position when they certainly launch the ETH products in Hong Kong.
OSL was approved as the first sub-custodian partner for ChinaAMC’s BTC and ETH ETFs.
It’s worth noting that approval odds for US spot ETH ETFs declined in May, amid the US SEC’s silence on the filings. But that’s not the only advantage Hong Kong ETFs can have over the US.
BTC, ETH ETFs in-kind subscription
Bosera’s ETF product, in partnership with HashKey Capital, will have an in-kind subscription. It means that users can subscribe to the ETF shares directly using BTC or ETH.
Alternatively, investors can redeem their shares and actually receive BTC or ETH in return. On the contrary, the US spot BTC ETFs only allow cash payments on the underlying asset.
Investor and crypto market commentator Simon Mow, marked the difference as an opportunity for Asia to accumulate more BTC.
“The Hong Kong Bitcoin ETFs will offer in-kind creation and redemption. This is a move towards US ETFs. The race is on to accumulate BTC in Asia”
At the time of writing, BTC was trading at $66,000, up 2.5% in the past 24 hours, per CoinMarketCap, a few hours after the approvals.
Antony Scarramucci, Bitcoin maxi and former White House director, claimed that the development has not yet been priced.
“Hong Kong has approved Bitcoin and Ethereum ETFs. Not priced in.”
VanEck analysts had done that before said Chinese investors were behind the recent gold accumulation and price rise. Ergo, the analyst viewed the approval of the Hong Kong ETFs as a driving force for BTC.
But the ETFs’ first trading dates have not been disclosed. It is worth noting that the approvals in Hong Kong show that most parts of the vetting process have been completed.
The launch and first day of trading will take place later and have not been disclosed by the Hong Kong Securities and Futures Commission.
Still, OSL’s Gary Tiu confirmed that approvals indicate launch day is “very soon.”
The adoption of spot ETH ETFs makes Asia a pioneer. However, it remains to be seen how the general market will react to the ETFs when they start trading.