Hong Kong will witness the launch of its Bitcoin and Ethereum Spot ETF according to a HashKey spokesperson. Slated to go live on April 30, the move marks a new era in the region positioning itself as the global digital asset hub. One particularly noteworthy feature is the structure of these ETFs. Unlike traditional cash-settled ETFs, these financial products will be based on an in-kind approach that facilitates the creation and redemption of shares directly with the underlying Bitcoin and Ethereum.
According to crypto trading firm Wintermute, the in-kind approach will draw more appeal from crypto natives, market makers, and digital-asset exchanges because of its greater efficiency and arbitrage opportunities. Besides closely tracking the actual market prices of Bitcoin and Ethereum, the in-kind mechanism also addresses concerns regarding market manipulation and excessive volatility, a bone of contention particularly between the U.S. SEC and ETF issuers.
While crypto enthusiasts in Hong Kong are allowed to own Ethereum ETFs. Meanwhile, the US: “You’re not allowed to own ETH ETFs or participate in airdrops because the SEC is protecting you. But if you want to get rich quick, why don’t you go to the casino or buy some lottery tickets?
Hong Kong Innovates as US Hesitates
Market experts worldwide are drawing comparisons to the ETF scene in the US market following the news. Besides the approval of a Bitcoin ETF, there is not much progress for an Ethereum ETF approval. Various issuers, such as Grayscale and BlackRock, have made moves regarding Ethereum ETFs. For instance, Grayscale has filed to convert its Ethereum Trust to an Ether ETF, and BlackRock has submitted an amendment to its 19b-4 ETH ETF application. However, the SEC has postponed decisions concerning Grayscale and Franklin.
Hong Kong’s latest launch also indicates the increasing integration of cryptocurrencies into mainstream financial systems and the growing acceptance of digital currencies by institutional investors globally. This step by Hong Kong could set a precedent for other financial centers in Asia and worldwide, promoting further adoption and innovation within the crypto space.