Hong Kong is on the verge of becoming a major player in the cryptocurrency exchange-traded funds (ETF) market, with potential approvals for spot Bitcoin ETFs and spot Ether ETFs expected as early as this week.
What Happened: This move positions Hong Kong as a competitor to Singapore and Dubai in the race to become a leading digital asset hub.
Quoting “people familiar with the matter,” Bloomberg reported that international asset manager Harvest Fund Management and a partnership between Bosera Asset Management and HashKey Capital are frontrunners for approval of their spot ETFs by the Hong Kong Securities and Futures Commission (SFC).
Both firms reportedly aim to launch their ETFs by the end of the month, pending finalization of listing details.
The potential green light from regulators signifies a significant shift for Hong Kong, which previously only permitted futures-based crypto ETFs.
These existing products, CSOP Bitcoin Futures, CSOP Ether Futures, and Samsung Bitcoin Futures, hold a combined value of roughly $170 million.
Also Read: Bitcoin Analyst Points To Secret Signal For ‘Very Very Bullish’ Phase
Why It Matters: This news comes on the heels of the successful launch of spot Bitcoin ETFs in the US in January 2024. These US-based ETFs have attracted a staggering $59 billion in assets thus far, contributing to a surge in the cryptocurrency market.
Bitcoin BTC/USD reached a record high of $73,798 in mid-March while Ethereum ETH/USD is trading around 25% off its 2021 all-time high levels.
Hong Kong’s foray into spot crypto ETFs aligns with its broader ambitions to become a digital asset hub.
The city has already implemented regulations for virtual asset service providers and approved platforms operated by HashKey Group and OSL Digital Securities.
However, Hong Kong’s crypto ambitions were marred by the high-profile fraud case involving unlicensed exchange JPEX last year.
Despite this setback, authorities remain committed to attracting crypto businesses, aiming to revitalize the city’s position as a global financial center.
What’s Next: The evolving landscape of cryptocurrency ETFs and their impact on global markets are likely to be a major talking point at industry gatherings like Benzinga’s Future of Digital Assets conference, scheduled for Nov. 19.
Read Next: Ethereum: A Deflationary Store of Value with Dividend Payouts?
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