Hong Kong-based financial services firm Venture Smart Financial Holdings Ltd. (VSFG) is gearing up to apply for a spot Ethereum exchange-traded fund (ETF) following the recent approval of a spot Bitcoin ETF in the United States. The move is seen as a significant step toward the broader adoption of cryptocurrencies and establishing Bitcoin as an asset class coexisting with traditional financial instruments.
VSFG Chairman Lawrence Chu revealed in a recent interview with The Block that the company is in the final stages of preparing an official application for a spot Bitcoin ETF to be submitted to the Hong Kong Securities and Futures Commission. In Hong Kong, thorough regulatory discussions usually precede such applications, and Chu emphasized that the submission indicates they are “95% there.”
Optimistic Q1 Approval and Eyes on Spot Ethereum ETF
Chu expressed optimism about the potential approval and listing of their spot Bitcoin ETF in the first quarter, paving the way for the submission of a spot Ethereum ETF application in the second quarter. However, he acknowledged that the timeline would ultimately depend on discussions with regulators, stating, “But that really depends on the conversation we have with the regulator. We will be ready.”
The move by VSFG aligns with a growing trend in Hong Kong, as Livio Weng, the chief operating officer of HashKey, mentioned that around 10 fund companies in the city are exploring the possibility of launching spot crypto ETFs. This indicates a potential race among asset managers to lower fees, similar to the observed trend in the United States.
Chu acknowledged the competitive landscape, noting that several ETFs could emerge, but he highlighted the nuanced role of VSFG. He stated, “Our role is slightly nuanced because I think we’re also trying to help ETF issuers get into the game.” He pointed out that, unlike U.S. ETF issuers, those in Hong Kong face licensing requirements and a knowledge gap, with many lacking dedicated digital asset teams.
“In Hong Kong, there’s a bit of a licensing requirement but also a knowledge gap. Most ETF issuers don’t have a digital asset team,” Chu explained. “It becomes less of a competition for us, but rather it’s competition between ETF issuers on their marketing side. From that point of view, you can think of us as more of a service provider to all ETF issuers.”
As the crypto ETF landscape evolves in Hong Kong, the anticipation of both spot Bitcoin and Ethereum ETFs underscores the increasing acceptance and integration of digital assets within traditional financial markets. The developments in Hong Kong mirror the global trend of institutions and financial entities embracing cryptocurrencies as legitimate investment options.
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