Hong Kong “Conditionally” Approves Bitcoin and Ether ETFs

Hong Kong’s Securities and Futures Commission has become the latest regulator to approve the first spot Bitcoin and Ethereum exchange-traded funds (ETFs). However, the approvals of at least three offshore Chinese asset managers remain conditional.

‘Conditional’ Approval Crypto ETFs

Although the regulator confirmed the conditional approval, it did not reveal any details of the ETFs. The regulatory conditions include fee payments, document filings, and approval of the Hong Kong Stock Exchange's listing, according to Reuters.

Crypto ETFs are listed on stock exchanges and can be traded from regular brokerage accounts without the need to create a crypto exchange account or use custodial services. These investment products lower the entry barrier and complexity of investment into cryptocurrencies.

Additionally, the Hong Kong unit of China Asset Management, which has been developing spot Bitcoin and Ether products, received approval to provide virtual asset management services.

“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 centre and a hub for virtual assets,” Bosera Asset Management stated.

The Rising Demand for Crypto

The conditional approval in Hong Kong followed approximately three months after the US Securities and Exchange Commission approved 11 Bitcoin ETFs in one go. These approvals ensued from prolonged efforts by several companies over the years. However, the US did not approve any Ether ETFs despite the application of multiple firms.

While the green light for Bitcoin ETFs in the US triggered a price surge of cryptocurrencies, the latest Hong Kong approval failed to do so. Bitcoin is trading below $63,000 apiece, as of press time, compared to its peak of about $74,000.

Other than the US and Hong Kong, spot Bitcoin ETFs are listed on the exchanges in eight additional jurisdictions, including Canada, Germany, Jersey, Switzerland, Australia and three more locations. However, those markets are small, and the demand for these crypto instruments remains low.