According to Cointelegraph: Six Facts to Know as Hong Kong Spot Crypto ETF Debut Nears
As Hong Kong braces itself for launching Spot Bitcoin and Ether exchange-traded funds (ETFs) on April 30, the crypto community is abuzz with anticipation. Here are six crucial takes on the upcoming event.
1. Welcome to the Club: Hong Kong's ETF market already boasts crypto ETFs trading on the Hong Kong Stock Exchange (HKEX). The CSOP Bitcoin Futures ETF and the CSOP Ether Futures ETF made their debut in late 2022, followed by the Samsung Bitcoin Futures Active ETF in January 2023.
2. Size Matters: Given the size of the ETF market in the US, Hong Kong's ETF market accounts for a mere 0.6%. As of March 2024, the US ETF industry boasted 3,457 products worth $8.9 trillion listed across three exchanges. In contrast, the size of the ETF market in Hong Kong amounted to an estimated $50 billion.
3. Be Different: One way Hong Kong's crypto ETF varies from their US counterparts is through redemption. Hong Kong's spot crypto ETFs allow for in-kind redemption; ETF intermediaries provide issuers with funds using actual cryptos like Bitcoin. This differs from cash-created spot crypto ETFs predominant in the US, where intermediaries are disallowed from handling Bitcoin.
4. Not the First: Spot Ether ETF is not debuting for the first time through this Hong Kong event. Canada allowed the approval of the first Ether futures ETFs in April 2021.
5. Geographical Limitations: Despite the close ties between the ETF issuers and mainland China, mainland Chinese citizens are expected to be unable to purchase Hong Kong's spot crypto ETFs due to the country's crypto-restrictive policies.
6. The Largest Player: Among the three ETF issuers in Hong Kong, China AMC has the most significant asset management volume. It boasts of 15 ETFs in Hong Kong with total assets under management pegged at $3.6 billion.
The initiation of spot crypto ETF trading in Hong Kong marks a key development in global crypto-related investment products and ETFs, setting the stage for future growth in the landscape.
