In a landmark decision, Hong Kong has given conditional approvals for asset managers to start spot Bitcoin and Ether exchange-traded funds (ETFs). This move is expected to boost the crypto market, which has been under significant pressure.

Following the US's lead, Hong Kong has approved crypto ETFs tied to Bitcoin (BTC) and Ethereum (ETH). Some of these ETFs will feature in-kind creation and redemption capabilities. It is anticipated that the approval of these ETF products in Hong Kong will be a significant catalyst for the cryptocurrency market. It is therefore expected to become a leading digital asset hub in Asia.

A minimum of three offshore asset managers are expected to introduce BTC and ETH spot ETFs soon. The Hong Kong branches of ChinaAMC, Harvest Global Investments, and Bosera Asset Management have obtained conditional approvals from the Hong Kong Securities and Futures Commission (SFC) to initiate the funds.

Bosera Asset Management stated, “The introduction of the virtual asset spot ETFs not only provides investors with new asset allocation opportunities but also reinforces Hong Kong’s status as an international financial center and a hub for virtual assets”. 

This approval occurred just three months after the U.S. authorized its first Bitcoin Exchange-Traded Funds (ETFs), which have already attracted approximately $12 billion in net inflows. While cryptocurrency remains prohibited in mainland China, Hong Kong has been marketing itself as a global center for digital asset innovation and trading.

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