Spot BTC ETFs Being Chased By Chinese Equity Funds Via Hong Kong

Harvest Fund Management, along with several prominent Chinese equity funds, has reportedly filed requests for spot BTC ETFs. Chinese mainland-based equity funds are said to have submitted applications for introducing spot Bitcoin exchange-traded funds (ETFs) via their Hong Kong subsidiaries. This development coincides with a month-long upsurge in cryptocurrency prices and heightened endeavors by Hong Kong to position itself as a global fintech center.

Chinese Equity Funds Seek Bitcoin ETFs

As per Security Times, a Chinese state-owned newspaper, not all the applying companies have been disclosed. Nonetheless, it is confirmed that the Hong Kong branch of Harvest Fund Management is among those seeking approval by the Securities & Futures Commission (SFC) of Hong Kong since January. In December 2022, the branch launched futures crypto ETFs, marking the inaugural futures crypto ETF development in Asia. The SFC had authorized virtual asset futures ETFs for public offering on October 31st, 2022.

In the meantime, the Hong Kong division of China Asset Management, a major Chinese asset management company, has purportedly engaged in a cooperation agreement with HashKey, a licensed crypto exchange in Hong Kong. This partnership aims to jointly promote and advance initiatives related to Web3 within the country. Although a concrete timeline for spot Bitcoin ETFs in Asia has not been announced, industry insiders suggest that relevant applications could emerge as early as this quarter.

Growth In Hong Kong

In December, the Hong Kong Monetary Authority and the SFC announced their readiness to consider applications for spot crypto ETFs. Subsequently, the U.S. Securities and Exchange Commission approved the first spot Bitcoin ETF in January of this year. Furthermore, the largest Bitcoin futures ETF in Hong Kong, namely the CSOP Bitcoin Futures ETF, saw a fivefold increase in assets under management over the past five months, reaching just over $100 million.

Hong Kong is striving to position itself as a leading global crypto hub. At the opening ceremony of the 2024 Hong Kong Web3 Carnival, Edmond Huang, Deputy Secretary of the Financial Services and the Treasury Bureau of Hong Kong, emphasized renewed commitment by local authorities toward amending relevant laws to subject over-the-counter (OTC) trading of virtual assets to formal regulatory oversight. Additionally, the city aims to empower intermediary institutions to provide various virtual asset services, including futures and ETF trading, highlighting its efforts to embrace and regulate the growing virtual asset sector.