Hong Kong’s First Bitcoin ETF Application Submitted

The Hong Kong branch of Harvest Fund Management, a Chinese asset management company, filed for a listing of a Bitcoin ETF on January 26th.

Chinese asset manager plans to launch Bitcoin ETF in Hong Kong.

Shalini Nagarajan Last updated: January 29, 2024 02:53 EST | 2 min read

The Hong Kong subsidiary of Chinese asset management firm, Harvest Fund Management, has recently filed an application for a spot Bitcoin ETF on January 26. This is the first submission of its kind in Hong Kong, according to Tencent News. The firm is primarily involved in asset management services for pension and profit-sharing plans, insurance companies, and enterprises and currently manages assets worth $121 billion as of 2021.

The Approval Process and Expected Launch

The Securities and Futures Commission (SFC) is reportedly expediting the approval for the launch of the Bitcoin ETF. It is expected that the ETF will be listed on the Hong Kong Stock Exchange shortly after the Chinese New Year, which will take place from February 10 to February 17 this year. While Harvest Fund Management and the SFC have not commented on the matter at this time, the expedited approval process indicates a positive outlook for the ETF’s launch.

Following the US’ Lead

This development in Hong Kong follows the recent approval of 11 spot Bitcoin ETFs by the US Securities and Exchange Commission (SEC) on January 10. This marks a significant milestone for the industry after previous rejections. Among the notable approved proposals were BlackRock’s IBIT, VanEck’s HODL, and Grayscale’s GBTC.

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Hong Kong’s Readiness for Spot Bitcoin ETFs

Hong Kong has been aligning itself with the global trend of embracing spot Bitcoin ETFs. In December, the SFC and the Hong Kong Monetary Authority jointly announced their readiness to accept applications for virtual asset spot ETFs. Additionally, they outlined the expected standard of conduct for intermediaries distributing these funds. The SFC’s favorability towards spot Bitcoin ETFs has been perceived positively by crypto leaders in Hong Kong.

Yat Siu, chairman of web3 investor Animoca Brands, noted that the SFC is open to expanding digital asset access and emphasized that a spot Bitcoin ETF is a relatively uncontroversial option. Julia Leung, CEO of Hong Kong’s SFC, has also expressed the regulator’s intention to evaluate spot Bitcoin ETFs and its willingness to consider proposals. Livia Wend, COO of HashKey Group, revealed that about ten fund firms are preparing virtual asset spot ETFs for launch in Hong Kong, with seven or eight of them being in advanced stages of preparation as of January 10.

Strengthened Crypto Oversight in Hong Kong

While Hong Kong demonstrates its openness to digital assets, the region also maintains strict regulations in this area. After a major scandal involving crypto exchange JPEX affected over 2,000 victims in 2023, Hong Kong’s central bank and securities regulator tightened crypto regulations. A new working group has been established to monitor local trading platforms and ensure a safer crypto environment.

Frequently Asked Questions (FAQs)

Q: What is the significance of Hong Kong’s first Bitcoin ETF application?

A: Hong Kong’s first Bitcoin ETF application marks a significant milestone for the region, aligning itself with the global trend of embracing spot Bitcoin ETFs. This development indicates a positive outlook for the launch of the ETF, providing easier access to digital assets for investors in Hong Kong.

Q: What is the expected timeline for the launch of the Hong Kong Bitcoin ETF?

A: The ETF is expected to be listed on the Hong Kong Stock Exchange shortly after the Chinese New Year celebrations, which will occur between February 10 and February 17 this year.

Q: How does Hong Kong’s regulatory environment for crypto differ from that of other regions?

A: Hong Kong has strict regulations governing digital assets, especially after a major scandal involving crypto exchange JPEX. The region’s central bank and securities regulator have tightened regulations and established a working group to monitor local trading platforms, ensuring a safer crypto environment.

Q: How many fund firms are preparing virtual asset spot ETFs in Hong Kong?

A: About ten fund firms are currently preparing virtual asset spot ETFs for launch in Hong Kong. As of January 10, seven or eight of them were already in advanced stages of preparation.

Future Outlook and Investment Recommendations

With the approval of spot Bitcoin ETFs in Hong Kong and the US, the global market for digital assets continues to expand. The introduction of Bitcoin ETFs presents new opportunities for investors looking to diversify their portfolios and gain exposure to the cryptocurrency market. As these ETFs offer a more regulated and accessible avenue for investment, it is expected that more institutional and retail investors will participate, driving further growth in the market. However, as with any investment, it is crucial for individuals to conduct thorough research and consider their risk tolerance before making investment decisions.

In conclusion, the submission of Hong Kong’s first Bitcoin ETF application marks a significant step towards embracing digital assets in the region. The positive response from the Securities and Futures Commission and the readiness of the market indicate promising prospects for the ETF’s launch. As the global market for digital assets continues to evolve, it is essential for investors to stay informed and make informed decisions based on their investment goals and risk tolerance.

References: 1. Harvest Fund Management applies for Bitcoin ETF in Hong Kong 2. US SEC approves 11 spot Bitcoin ETFs 3. Hong Kong’s preparation for virtual asset spot ETFs 4. Tightening crypto regulations in Hong Kong after JPEX scandal

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