The Hong Kong Bitcoin and Ethereum spot ETFs will reportedly begin trading on April 30, adding to the list of US-based counterparts that have been scooping up bitcoin in large quantities.
The Hong Kong spot crypto ETFs will have an in-kind subscription and redemption model.
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Posted April 24, 2024 at 3:20 am EST.
The highly anticipated spot bitcoin and ethereum exchange-traded funds (ETFs) are all set to begin trading early next week, according to a report from Bloomberg citing a spokesperson for one of the issuers, HashKey.
According to the HashKey executive, the crypto ETFs will be launched on April 30. These spot bitcoin and ether ETFs will have an in-kind subscription and redemption mechanism which allows for the underlying assets to be swapped for ETF units and vice versa, whereas the US funds operate on a cash redemption model.
Last week, Unchained reported that the Hong Kong markets regulator had cleared the way for four firms to go ahead with their planned launch of spot bitcoin and ether ETFs. China Asset Management, Bosera Capital, HashKey Capita and Harvest Global all said they had received in-principle approval for their funds.
Some analysts estimate that these funds could bring in up to $25 billion worth of demand, subject to investors from mainland China finding a way to access these investment products.
Others say that Hong Kong ETFs would be lucky to capture $500 million worth of inflows, given the tight restrictions in place for Chinese investors when it comes to crypto investments and high fee structures from these relatively smaller issuers.
The U.S.-based spot bitcoin ETFs have seen unprecedented demand after their launch in January, barring Grayscale’s GBTC which has consistently recorded outflows, while seeing a less dramatic reduction in assets under management (AUM) given bitcoin’s positive price action over the last few months.
Bitcoin ETF Flow (US$ million) – 2024-04-19
TOTAL NET FLOW: 59.7
(Provisional data)IBIT: 29.3
FBTC: 54.8
BITB: 4.9
ARKB: 12.5
BTCO: 3.9
EZBC: 1.9
BRRR: 0
HODL: -1.8
BTCW: 0
GBTC: -45.8
DEFI: 0For all the data & disclaimers visit:https://t.co/4ISlrCgZdk
— Farside Investors (@FarsideUK) April 20, 2024
While catching up to the U.S. spot bitcoin ETFs might seem out of reach in the short term for Hong Kong based issuers, they are likely to lead the way with value added to their spot ether ETFs. In the U.S., the outlook for a spot ether ETF being approved by the U.S. Securities and Exchange Commission (SEC) looks increasingly grim to analysts watching the market closely.
Bloomberg’s James Seyffart and Eric Balchunas maintain that there is just a 25% chance that spot ether ETF applications will be approved by the May 23rd deadlines. This comes even amid some prospective issuers, includingBlackRock, amending their applications.
Great summary of all the action.. which looks like a final nudge to try and get the SEC’s attention, altho most likely in vain. We were pessimistic on approval bf it was cool and we’re pessimistic now too. https://t.co/xHcTW7FYiT
— Eric Balchunas (@EricBalchunas) April 23, 2024
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