Hong Kong Clearing the Path for Bitcoin and Ether ETFs

Hong Kong is taking steps towards introducing spot exchange-traded funds (ETFs) for Bitcoin (BTC) and Ether (ETH), as local regulators have issued conditional approvals to three local issuers. The Hong Kong Securities and Futures Commission (SFC) granted its first approvals for spot BTC and ETH ETFs on April 15. Harvest Fund Management, Bosera Asset Management, and China Asset Management, all offshore Chinese asset managers with units in Hong Kong, will soon launch their spot Bitcoin and Ether ETFs. Harvest and Bosera received conditional approvals from the SFC, while China Asset Management received regulatory approval to offer virtual asset management services and is developing spot ETFs for BTC and ETH.

When the SFC issues a conditional authorization letter for an ETF application, it means the application meets the commission’s requirements, but further conditions must be met, such as fee payments, document filing, and approval from the Hong Kong Stock Exchange. Bosera’s Bitcoin and Ether ETFs will be launched as in-kind ETFs in partnership with HashKey Capital, meaning new ETF shares can be created using BTC and ETH. This is different from the cash-create redemption model used in spot Bitcoin ETFs in the United States, where new ETF shares can only be created with cash.

The introduction of spot ETFs for virtual assets not only offers new investment opportunities for investors but also strengthens Hong Kong’s position as an international financial center and a hub for virtual assets, according to Bosera. Other issuers, such as ChinaAMC, will be launching spot Bitcoin and Ether ETFs in partnership with OSL Digital Securities, a major local digital asset platform. reached out to Bosera and Harvest for comment but did not receive a response.