The Hong Kong Securities and Futures Commission has approved three spot Bitcoin and Ethereum exchange-traded funds (ETFs) that will begin trading on April 30. The ETFs will be offered by China Asset Management Co. (China AMC), Harvest Global Investments, and Bosera International and HashKey Capital, with Bank of China International-Prudential Trustee Limited (BOCI-Prudential) serving as the custodian for all three. These ETFs aim to closely track the performance of Bitcoin and Ethereum, as measured by the CME CF Bitcoin Reference Rate and the CME CF Ether-Dollar Reference Rate, respectively. Fee information for the ETFs has been revealed, with one issuer offering a fee of 0.3% after a six-month waiver.
According to Bloomberg Intelligence ETF analyst James Seyffart, a potential fee war could break out in Hong Kong over these Bitcoin and Ethereum ETFs. Seyffart highlighted the fees for each issuer, with China AMC having a management fee of 0.99%, Bosera and HashKey with a fee of 0.6%, and Harvest Global offering a six-month waiver and a 0.3% fee thereafter. Seyffart noted that Harvest Global’s low fee could potentially trigger a fee war among the issuers. The approval of these ETFs marks an important milestone in Hong Kong’s crypto investment landscape, providing investors with safer and more regulated options for investing in virtual assets.
In a statement announcing the approval of their ETFs, China AMC emphasized that these products offer retail and institutional investors a secure and convenient way to invest in virtual assets within a regulated framework. The company’s Head of Digital Assets and Head of Family Office Business, Thomas Zhu, highlighted that the in-kind feature of the ETFs allows coin holders to easily convert their coins into regulated ETFs managed by professional fund managers and regulated custodians. China AMC sees the approval of these ETFs as a strategic move to capitalize on Hong Kong’s efforts to foster a vibrant web3 ecosystem, positioning itself to develop innovative investment offerings that cater to the evolving needs of investors.
The approval of Bitcoin and Ethereum ETFs in Hong Kong represents a significant development in the region’s financial landscape, providing investors with more accessible and regulated options for investing in cryptocurrencies. The competition among the ETF issuers, including China AMC, Harvest Global Investments, and Bosera International and HashKey Capital, could lead to a potential fee war as they vie for investors’ attention with competitive fee structures. With the ETFs set to start trading on April 30, market participants will be closely watching to see how these new financial products perform and how they impact the broader crypto investment landscape in Hong Kong and beyond.
As the first Bitcoin and Ethereum spot ETFs in the Asian market, the approval of these financial products in Hong Kong marks a significant milestone in the region’s crypto investment landscape. The innovative investment choices offered by China AMC, Harvest Global, and Bosera International and HashKey Capital provide investors with a regulated and secure way to participate in the cryptocurrency market. With the ETFs aiming to closely track the performance of Bitcoin and Ethereum, investors can gain exposure to these digital assets through regulated and professionally managed investment vehicles, further legitimizing the crypto investment space in Hong Kong and enhancing investor confidence in the market.
