Hong Kong’s Historic Decision: Bitcoin and Ether ETFs Gain Approval

Hong Kong has joined the list of countries approving spot exchange-traded funds (ETFs) for Bitcoin (BTC) and Ether (ETH), with the local regulatory body granting approvals to three local issuers. The Hong Kong Securities and Futures Commission (SFC) conditionally approved its first spot BTC and ETH ETFs on April 15. Offshore Chinese asset managers, including the Hong Kong units of Harvest Fund Management, Bosera Asset Management, and China Asset Management (ChinaAMC), are set to launch their spot Bitcoin and Ether ETFs in collaboration with HashKey Capital. OSL Digital Securities will act as the sub-custodian for ChinaAMC and Harvest. The SFC’s approval allows the ETFs to be launched as in-kind ETFs, enabling the issuance of new ETF shares using BTC and ETH. This model enhances market liquidity and reduces reliance on cash settlements. Although the approval in principle brings the firms closer to the launch, it is still unclear when the spot Bitcoin ETF will start trading in Hong Kong. The Hong Kong Stock Exchange will need approximately two weeks to finalize the listing procedures and other arrangements.