Hong Kong has reportedly received its first application for a spot Bitcoin (BTC) exchange-traded fund (ETF) just two weeks after the United States Securities and Exchange Commission approved the first spot BTC ETF in the US. According to a Jan. 29 Tencent report, the Hong Kong branch of Harvest Fund Management, a major Chinese asset manager, submitted the first application to the Securities and Futures Commission (SFC) on Jan. 26.
The report shows that the company plans to launch the city’s first ETF after the Lunar New Year holiday, which is on February 10 this year. This development comes about a month after Hong Kong’s financial regulators, the Hong Kong Monetary Authority (HKMA) and SFC, expressed their willingness to allow financial institutions to apply for spot ETF investment products.
However, authorities set strict requirements for the applicants. These include stringent custodial rules and the mandate that ETF transactions must occur through either an SFC-licensed crypto platform or authorized financial institutions adhering to HKMA’s regulatory standards. Harvest Hong Kong’s swift application demonstrates the preparedness of the firm and the enthusiasm these products have sparked since their introduction in the US.
Other Companies Exploring Bitcoin ETFs in Hong Kong
Earlier this month, Livio Weng, the chief operating officer of Hong Kong’s HashKey crypto exchange, said that about 10 fund companies have started looking into launching spot crypto ETFs in the city.
According to Bloomberg, Hong Kong-based Venture Smart Financial Holdings Ltd. (VSFG) plans to introduce its spot Bitcoin ETF within the first quarter. Additionally, OSL, a Hong Kong-licensed crypto exchange, has announced that it is in discussions with other asset managers to explore the potential launch of a spot Bitcoin ETF in Hong Kong by mid-2024.
Several existing crypto platforms that introduced futures-based crypto ETFs in Hong Kong are also expected to be among spot Bitcoin ETF filers. Samsung Asset Management, which launched the Samsung BTC Futures ETF last year, reportedly stated that it wouldn’t “eliminate the possibility of exploring to launch a spot ETF.”
Hong Kong’s fund sector analysts opine that mirroring the US spot Bitcoin ETF landscape may lead to similar performance results. Recent data analysis shows that among the 27 Bitcoin spot ETFs in the US, Grayscale Bitcoin Trust (GBTC) dominates with a market share of $20.2 billion. Other major players in the US market include BlackRock’s IBIT ($2 billion), Fidelity Fund’s FBTC ($1.6 billion), and Proshare’s BITO ($1.68 billion).