Hong Kong would soon have its first Bitcoin and Ethereum exchange-traded funds as three asset management firms have submitted their ETF applications to the Securities and Futures Commission [SFC], local media Nikkei Asia reported.
The three AUMs in the race are CSOP Asset Management, Samsung Asset Management, and Mirae Asset Global Investments.
Once granted approval, bitcoin and ether futures will go live on the Chicago Mercantile Exchange, according to people familiar with the plans.
The move comes amidst Hong Kong’s grand ambition to position itself as the global crypto hub.
Despite the FTX contagion that sent a chill across the industry, institutional and retail clients in Hong Kong, mainland China, and Taiwan have shown more interest in investing in cryptocurrency ETFs.
This was stated by Chris Pigott, head of Asia ETF services for Brown Brothers Harriman, citing an annual survey by the company. However, the recent trouble at FTX and cryptocurrency market volatility could impact investors’ views, he said.
Pigott expects the first product to be released before the end of 2022 or early next year, depending on issuer readiness.
The Hong Kong SFC stated that the city’s cryptocurrency industry had made “significant advancement” in the past four years, providing the framework for retail investors, in contrast to mainland China, which has explicitly banned cryptocurrencies.
But on the regulatory front, officials are still cautious. Last month, the Hong Kong Monetary Authority told the city’s Legislative Council that sound regulation was necessary to become a digital asset hub.
The city is amending its anti-money laundering law, strengthening investor protection, and requiring all virtual asset exchanges to be licensed. The bill is anticipated to be passed this year-end.
Bitcoin ETFs Regain After BTC Tapped A 2-Week High
That said, approvals for the ETF applications could take up to three months but would be prioritized early if in the government’s interest. All sources declined to be named, claiming the need to protect their identities.
On Nov 30, Bitcoin strategy-focused exchange-traded funds tracked higher as the underlying digital currency hit a two-week trading high.
Funds such as the ProShares Bitcoin Strategy ETF [NYSEARCA: BITO], Valkyrie Bitcoin Strategy ETF [NASDAQ: BTF], and the VanEck Bitcoin Strategy ETF [BATS: XBTF] all traded in the green early on as Bitcoin gained over 2%.
At the moment, Bitcoin is hovering slightly above the $17k mark after a massive decline in early November.