The Hong Kong Securities and Futures Commission (SFC) has approved three spot Bitcoin and Ethereum exchange-traded funds (ETFs) that will begin trading on April 30. The issuers of the ETFs, including China Asset Management Co. (China AMC), Harvest Global Investments, and Bosera International and HashKey Capital, have announced their fees, with one offering a low fee of 0.3% after a six-month waiver. A potential fee war could break out in Hong Kong over these ETFs.
The approved ETFs aim to closely track the performance of Bitcoin and Ethereum, as measured by the CME CF Bitcoin Reference Rate and the CME CF Ether-Dollar Reference Rate, respectively. China AMC will have a management fee of 0.99%, Bosera and HashKey will have a fee of 0.6%, while Harvest Global offers a six-month waiver and a 0.3% fee afterwards. The three ETFs will have Bank of China International-Prudential Trustee Limited (BOCI-Prudential) as their custodian.
China AMC, in their announcement, stated that their ETFs are expected to begin trading on the Hong Kong Stock Exchange (HKEX) on April 30, making them the first such financial products in the Asian market. The company believes that the spot Bitcoin and Ether ETFs will offer retail and institutional investors a safe, efficient, and convenient way to invest in virtual assets within a regulated framework. The in-kind feature of converting coins to fully regulated ETFs managed by professional fund managers and regulated custodians is expected to attract coin holders.
With the approval of the Bitcoin and Ethereum ETFs, China AMC looks forward to developing innovative investment offerings and strategic differentiations that will help clients achieve their investment goals. The company believes that, in line with Hong Kong’s goals to cultivate a vibrant web3 ecosystem, it is well-positioned to provide innovative investment choices for investors. The approval of these ETFs marks a significant step in the development of the digital asset market in Hong Kong and Asia as a whole.
The approval of the ETFs in Hong Kong represents a major milestone in the development of the digital asset market in the region. The low fees offered by the issuers, including a 0.3% fee after a six-month waiver by Harvest Global, demonstrate a potential fee war that could benefit investors. The introduction of these ETFs provides retail and institutional investors with a regulated and secure way to invest in Bitcoin and Ethereum, further legitimizing the digital asset market.
Overall, the approval of the Bitcoin and Ethereum ETFs in Hong Kong signals the growing acceptance and adoption of virtual assets in the financial industry. The competition among issuers to offer the lowest fees reflects a positive development for investors seeking to enter the digital asset market. With the launch of these ETFs on April 30, investors in Hong Kong and Asia will have new opportunities to invest in cryptocurrencies within a regulated and secure framework.
