Hong Kong is poised to launch new Bitcoin and Ethereum exchange-traded funds (ETFs) tomorrow at 9:30 a.m. EDT, with expectations of achieving a larger initial trading volume compared to the United States.
Zhu Haokang, head of digital asset management and family wealth at Huaxia, expressed confidence in Hong Kong’s ETF debut, stating, “I am very confident that the trading scale of the Hong Kong virtual asset spot ETF on the first day of listing can exceed that of the United States.”
The US witnessed a first-day trading volume of $125 million across ten Bitcoin spot ETF issuers earlier this year, a benchmark that Hong Kong aims to surpass.
Unique Features of Hong Kong’s ETFs
These ETFs will introduce distinctive features not found in their US counterparts. This includes the ability for in-kind redemptions and subscriptions, as well as facilitating transactions in multiple currencies such as Hong Kong dollars, US dollars, and RMB. Additionally, the ETFs will enable wallet-to-wallet transfers, enhancing their appeal to a global audience.
Wayne Huang, OSL ETF Project Lead, highlighted the robust regulatory framework in Hong Kong supporting these initiatives. He emphasized Hong Kong’s potential to be the first in the world to launch an Ethereum spot ETF, citing clear guidelines from the China Securities Regulatory Commission regarding the classification of cryptocurrencies like Ethereum (ETH) as non-securities.
Exclusion of Mainland Chinese Investors
However, mainland Chinese investors are currently excluded from participating in these ETFs. Nonetheless, international, institutional, and retail investors from Hong Kong and other regions are eligible to participate.
Setting a New Benchmark
Hong Kong’s market approach, particularly its operational processes such as physical subscriptions and stringent anti-money laundering measures, sets a new benchmark in the cryptocurrency ETF domain. Huang emphasized that physical subscription is a pioneering initiative for Hong Kong ETFs, detailing the secure transfer process required for investors through approved brokerage firms.
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