The Securities and Futures Commission (SFC) of Hong Kong approved the applications for Bitcoin and Ethereum spot ETFs yesterday, marking further recognition of cryptocurrencies in mainstream financial markets. The current market is eagerly anticipating the opening of trading for these ETFs, and OSL CEO Wayne Tsoi said that, barring any unforeseen circumstances, investors will be able to purchase Bitcoin spot ETFs by the end of April.
Yesterday, the Securities and Futures Commission (SFC) of Hong Kong approved the applications for Bitcoin and Ethereum spot ETFs, further promoting the mainstream adoption of cryptocurrencies. The institutions that will be launching these ETFs include Galaxy Digital, China Asset Management, and Fidelity International/HashKey Capital. The market is currently awaiting the official opening of trading.
OSL CEO: Bitcoin ETF to be available for trading by the end of the month
OSL, a licensed exchange in Hong Kong and also the custodian and infrastructure service provider for Galaxy Digital and China Asset Management, confirmed this news today, according to CEO Wayne Tsoi, as did individuals associated with HashKey Exchange, another licensed exchange currently applying for a license.
However, regarding the launch time of the Ethereum spot ETF, OSL CEO Wayne Tsoi stated that the specific duration is still uncertain. According to responses from several CEOs of licensed and applying exchanges in Hong Kong, the launch interval may be a few weeks or even a month later.
How much incremental capital will Hong Kong ETFs bring?
Another area of market interest is how much incremental capital these ETFs will bring to the cryptocurrency market. Katie He, Product and Strategy Director at China Asset Management, expressed optimism about the upcoming virtual asset spot ETFs, expecting significant demand. She explained that in Hong Kong, only professional investors can invest in spot ETFs listed in the United States, which will generate greater interest among general investors for local spot products.
However, Bloomberg ETF analyst Eric Balchunas poured cold water on this enthusiasm. In a tweet yesterday, he stated, “Don’t expect too much capital flow… I think attracting $500 million would already be pretty good.” He offered the following four reasons to explain his stance:
1. The Hong Kong ETF market is small, with only $5 billion in assets, and mainland Chinese residents should not be able to purchase the product, at least not officially.
2. The three approved issuers (Fidelity, China Asset Management, Galaxy Digital) are also small in scale, with no giants like BlackRock currently participating.
3. The liquidity or efficiency of the underlying ecosystem is low.
4. The management fees will be high, making them relatively weak compared to management fees in the United States.
Although some believe that the upcoming Hong Kong spot ETFs may attract mainland Chinese investors through southbound funds, this viewpoint is controversial because mainland investors are currently not allowed to invest in Hong Kong’s cryptocurrency futures ETFs, let alone spot cryptocurrency products.
In response to this, Gary Tiu, Director of Regulatory Affairs at OSL, remains positive.