Hong Kong Contemplates Spot Crypto ETF Launch, Potentially Fuelling US-China Economic Rivalry
Summary:
Reports indicate the Hong Kong government is considering the launch of a spot crypto ETF, despite continued regulatory resistance in the U.S. This potential move could significantly impact the ongoing economic rivalry between the U.S. and China, according to BitMEX co-founder, Arthur Hayes. Additionally, Hong Kong may allow retail investors to gain exposure to cryptocurrencies such as Bitcoin, provided regulatory concerns are met. This follows the successful launch of future-linked crypto ETFs in the U.S. and Hong Kong, signaling a growing acceptance of such financial products.
Enthusiasm is mounting in the digital currency sector as word spreads of the Hong Kong administration apparently contemplating the initiation of an exchange-traded fund (ETF) specific to spot cryptocurrency, despite comparable products facing continual regulatory resistance within the United States. The potential introduction of spot crypto ETFs by Hong Kong might mark a pivotal progression amidst the ongoing economic rivalry between the U.S. and China, suggests BitMEX co-founder Arthur Hayes. On November 6, Hayes voiced his anticipation for this economic contest on the platform once known as Twitter, asserting that such rivalry would ultimately prove beneficial for Bitcoin.
Hayes proposed that if the U.S., with its represented asset manager, BlackRock, initiating an ETF, then China needs an equivalent asset manager to follow suit. Coin Bureau, another cryptocurrency entity, promptly responded to the anticipated launch of a spot crypto ETF in Hong Kong. They suggested that the U.S. Securities and Exchange Commission (SEC) might find itself under scrutiny as other jurisdictions, like Hong Kong, introduce spot Bitcoin ETFs. Coin Bureau proposed that the SEC’s ongoing resistance to financial market advancements might leave a gap that other nations are ready to fill.
Influencer in the crypto world, Lark Davis, highlighted the importance of this promising spot crypto ETF news from Hong Kong, noting the clear intentions of Chinese investors not to overlook lucrative opportunities within the crypto sector. As per Bloomberg reports on November 5, Hong Kong is considering the granting of access to retail investors to spot ETFs associated with digital currencies like Bitcoin, so long as regulatory concerns are effectively addressed, stated Securities and Futures Commission CEO Julia Leung. Both Hong Kong and the U.S. have yet to approve a spot crypto ETF but have permitted crypto ETFs linked to futures contracts.
Unlike a Bitcoin ETF connected to futures contracts, which utilises futures contracts to mimic BTC prices, a spot Bitcoin ETF owns BTC directly, thus offering investors direct exposure to the asset. The U.S. was the pioneer in the initiation of futures-related crypto ETFs in 2021. Later, Hong Kong followed allowing the introduction of CSOP cryptocurrency futures products in late 2022. Combined with the Bitcoin Futures Active ETF by Samsung, Hong Kong now reportedly holds $65 million in crypto ETF assets as per Bloomberg. Concurrently, there remains low demand for futures crypto ETFs in Hong Kong, which take up only a small fraction when compared to other world crypto funds.
The Hong Kong and Shanghai Banking Corporation, the city's leading bank, reportedly permitted its customers to buy and sell Bitcoin and Ether (ETH)-related ETFs as of June 2023.
Published At
11/6/2023 11:16:35 AM
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