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Hong Kong only just approved Bitcoin ETFs earlier this week but the products could potentially be launched as soon as this month.
OSL told The Block that the Chinese firms that received the green light for Bitcoin ETFs in Hong Kong, such as China Asset Management, HashKey Capital Limited and Harvest Global Investments, might debut their products in April.
“Reports suggest a spot Bitcoin ETF may start in late April, with a spot Ethereum ETF following shortly after,” said Patrick Pan, chairman of the board and CEO of OSL.
“All parties are working expeditiously to complete the process. However, exact dates remain unconfirmed at this time. We view the recent approval in principle positively as it moves the industry closer to launching spot crypto ETFs.”
Gary Tiu, chief of regulatory affairs and head of OSL, highlighted the benefits of investing in a Bitcoin ETF compared to just holding the asset directly.
“What it means is if you have an investor who has long BTC," he explained. "But they don't want to exit the BTC position. But they want to swap it for another type of instrument — for example, for an ETF instrument or for an interest in the fund that tracks the performance of BTC — this now gives them the channel to do so,” Tiu added.
The announcement comes as Hong Kong greenlit Bitcoin and Ethereum ETFs earlier this week, marking a significant leap forward for the burgeoning crypto market in the region and establishing Hong Kong as a potential leader in digital asset innovation.
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Katie He, head of product and strategy of China Asset Management, said the firm's upcoming crypto ETFs may attract "substantial" demand as currently professional investors in Hong Kong only have access to US-listed spot ETFs.
“They can access spot bitcoin on the SFC-licensed VATPs, or they can get access through futures-based bitcoin or ether ETFs which may raise efficiency concerns due to high rolling costs associated with futures contracts,” He continued.
“Meanwhile, only professional investors in Hong Kong could have access to US-listed spot ETFs, so the introduction of spot products in Hong Kong really provides the investment opportunity to a wider audience."
Hong Kong's move towards a friendlier crypto environment is already attracted firms beyond its borders. Alchemy Pay has chosen Hong Kong to be its strategic crypto hub for its expansion plans outside of China. The Singapore-founded crypto payments firm pointed towards Hong Kong's efforts to boost its Web3 initiatives as reasons for its decision.
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However, Bloomberg Senior ETF Analyst, Eric Balchunas, warned investors to not get too excited, highlighting that the Hong Kong ETF market is "tiny."
Latest on HK spot Bitcoin ETFs: They have been approved to exist but not launch (yet). Rumor has it launching next wk so to not compete w Dubai conf. Don't expect a lot of flows (I saw one estimate of $25b that's insane). We think they'll be lucky to get $500m. Here's why:
— Eric Balchunas (@EricBalchunas) April 15, 2024
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