In Hong Kong, the process of listing the initial Bitcoin and Ethereum spot ETFs is gaining momentum at an accelerated pace. Top Chinese asset managers are now making final preparations to initiate trading as early as April 30th. This upcoming launch has generated significant anticipation among Asian crypto investors, inspired by the impressive performance of US spot Bitcoin ETFs which amassed over $56 billion in assets within a short three-month period post-launch.
Competing With US Bitcoin ETFs
HashKey Capital and Bosera have revealed that Hong Kong’s spot-ETFs will implement a new method for subscriptions and redemptions called “in-kind.” Under this system, investors can exchange underlying assets for ETF units or swap ETF units for the underlying assets, contrasting the cash redemption model commonly used by US funds.
In the words of Evgeny Gaevoy, the co-founder of crypto liquidity provider Wintermute Trading Ltd, the “in-kind approach” holds significant appeal for crypto natives, market makers, and digital asset exchanges. This method provides enhanced efficiency and more ample opportunities for arbitrage.
A representative from HashKey announced that the Bosera-HashKey Capital spot products are set to begin trading on April 30. In contrast to Hong Kong, where crypto-futures-backed ETFs are available, including CSOP Bitcoin Futures, CSOP Ether Futures, and Samsung Bitcoin Futures, the combined assets under management for these ETFs add up to approximately $175 million. This is a small fraction compared to US offerings like the $2.5 billion ProShares Bitcoin Strategy ETF.
Gaevoy commented, “It’s important to keep reasonable goals for the Hong Kong ETF market growth. This is particularly significant given the limited scope of present futures ETFs in the region.”
Does Hong Kong Have Its Own BlackRock
Hong Kong has been vying with Singapore and Dubai for more than a year to set up a strictly controlled center for the virtual asset sector. The interest in forthcoming ETFs (Exchange Traded Funds) will provide evidence of Hong Kong’s advancement in this pursuit.
Possible sources of demand for cryptocurrencies include the substantial wealth of Chinese residents located in the city and crypto exchanges and market makers based in the Asia-Pacific region. According to Bloomberg Intelligence ETF Analyst Rebecca Sin, it is projected that Hong Kong Bitcoin ETFs will manage no more than $1 billion in assets within a two-year timeframe.
US Bitcoin funds led by companies such as BlackRock Inc. and Fidelity Investments have gained significant attention and interest from around the world. In contrast, Hong Kong’s potential Bitcoin fund issuers, Harvest Global and Bosera Asset Management, have yet to achieve similar recognition. According to Roger Li, co-founder of One Satoshi, “Hong Kong lacks the influence or reputation of a ‘BlackRock’ to draw attention.”
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2024-04-24 07:31