Hong Kong to Launch Bitcoin and Ether ETFs, Differing from U.S. Models
Summary:
Bitcoin (BTC) and Ether (ETH) exchange-traded funds (ETFs) in Hong Kong are scheduled for launch on April 30, following regulatory approval. Issuer ChinaAMC's spot Bitcoin and Ether ETFs will track the performance of the crypto indexes on the Chicago Mercantile Exchange and investors can cash their redemptions in either fiat or crypto. Fees could range from 0.3% to 0.99%. BOCI-Prudential and OSL will act as custodians for the ETFs, while the daily timing for cash and crypto redemptions has been defined.
Bitcoin (BTC) and Ether (ETH) exchange-traded funds (ETFs) in Hong Kong will markedly diverge from those in the US, as a regulatory approval paves their way for an April 30 initiation. As per ChinaAMC, the issuer, its spot Bitcoin and Ether ETFs will shadow the performance indicators of the crypto indexes on the Chicago Mercantile Exchange (CME). Also, investors can cash their redemptions in either fiat or crypto. Moreover, the crypto ETFs by ChinaAMC will have the three currencies of US dollar, Hong Kong dollar, and Chinese yuan as their denominators. BOCI-Prudential, the investment asset manager, and OSL, the crypto exchange, will serve as custodians for the ETFs. These two companies will also hold the spot Bitcoin and Ether ETF assets on behalf of issuer Harvest Global. They are said to be effectively overcoming hurdles like steep margin requirements, and price hikes due to a lack of short positions and rolling losses, hence mirroring the actual Bitcoin and Ethereum value more precisely, claims a Harvest Global statement. In collaboration with Bosera Asset Management, HashKey Capital, located in Hong Kong, will co-introduce its spot Bitcoin and Ether ETFs too. On ETFs' future prospects, it said a subscription mechanism allowing direct subscription to corresponding ETF shares using Bitcoin and Ethereum may speed up Hong Kong and Asia's virtual asset market evolution, drawing more global capital influx. Bloomberg's senior ETF analyst, Eric Balchunas, projected on April 24 that Hong Kong Bitcoin ETFs' maintenance charges could vary from 0.3% to 0.99%, which is considerably higher than US-based spot Bitcoin ETFs, where the fee can be lesser than 0.25% yearly. James Seyffart, another analyst from Bloomberg, highlighted that a potential fee competition could be brewing in Hong Kong for these Bitcoin & Ethereum ETFs. The three ETF issuing entities are set to create and redeem respective ETF shares via regulated crypto exchanges in Hong Kong, namely OSL and HashKey. Until 11 am local time, investors can redeem shares for cash, or they can opt for crypto withdrawals until 4 pm. BOCI Prudential has agreed to act as a custodian for all issuers, with market makers like Vivienne Court, Virtu Financial, among others.
Published At
4/24/2024 7:50:00 PM
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