Eric Balchunas, a Bloomberg analyst, recently weighed in on the approval of Hong Kong spot ETFs, characterizing the development as “child’s play” compared to the U.S. market. While acknowledging the approval of spot ETFs in Hong Kong, Balchunas noted that they have yet to be launched, with listings expected to commence next week. However, he emphasized that all issuers involved are relatively smaller players compared to industry giant BlackRock.
Balchunas highlighted a key difference between the Hong Kong and U.S. ETF ecosystems, noting that the former is less liquid. Consequently, investors may encounter wider spreads and discounts, leading to higher spot ETF fees ranging from 1% to 2% compared to the U.S.
Despite these challenges, Balchunas expressed optimism about the impact on Bitcoin, suggesting that the approval of spot ETFs in Hong Kong would provide the cryptocurrency industry with additional investment opportunities.
“I’m just saying it’s child’s play vs U.S. Also long-term some of this could go away: more liquid, tighter spreads, lower fees and bigger issuers involved. But short/medium term we have more moderate expectations. That’s all,” stated Eric Balchunas.
The comments from Balchunas come in the wake of reports on April 15 indicating that several management companies had received regulatory approval to launch spot ETFs for Bitcoin and Ethereum in Hong Kong. Unlike the U.S., where similar funds were launched only for Bitcoin in January, Hong Kong-based companies were simultaneously approved to launch funds for the two largest crypto assets.
Among the notable approvals, major Chinese asset management firm China Asset Management’s Hong Kong unit received permission from the Hong Kong Securities and Futures Commission (SFC) to provide retail asset management services related to spot crypto ETFs. Additionally, two funds from Harvest Global Investments received in-principle approval from the SFC.
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