Hong Kong set to approve first spot Bitcoin ETFs

The approval is part of efforts by Hong Kong authorities to revive the city's appeal as a global financial hub

Hong Kong is on track to green-light spot bitcoin exchange-traded funds (ETFs), positioning itself as Asia's pioneer in offering these popular investment vehicles.

Sources have indicated that regulatory approval could come as early as mid-April, with the first batch of approvals expected to be announced by April 15.

The move comes amidst efforts by Hong Kong authorities to rejuvenate the city's appeal as a global financial hub, which has been tarnished by pandemic-related restrictions, China's economic challenges, and tensions between China and the United States.

Accelerating the approval process underscores the city's determination to bolster its attractiveness for financial trading.

If approved, these ETFs could significantly impact global investment and propel the adoption of cryptocurrencies to new heights, according to Adrian Wang, CEO of Metalpha, a Hong Kong-based crypto wealth manager.

The United States paved the way for Bitcoin ETFs earlier this year, drawing substantial investor interest and net inflows of around $12 billion. With Bitcoin surging over 60% this year and reaching an all-time high in March, the anticipation for such investment products is palpable.

Several mainland Chinese and Hong Kong asset managers, including China Asset Management, Harvest Fund Management, and Bosera Asset Management, have submitted applications to launch these ETFs.

While China Asset Management and Harvest Fund Management's Hong Kong units have obtained approval to manage portfolios with investments in virtual assets exceeding 10%, the final list of approved ETFs remains pending.

Once approved, the Hong Kong Stock Exchange is expected to list the ETFs within two weeks, with communication between issuers and the exchange likely shortening this timeframe to 10 days.

Ethereum ETFs have also been on the line. However, the likelihood of the United States Securities and Exchange Commission (SEC) approving a spot Ethereum ETF remains at 14%, according to Polymarket, signaling cautious sentiment due to recent SEC activity and increased scrutiny of cryptocurrencies.

Despite initial optimism following the approval of spot Bitcoin ETFs, ongoing SEC investigations and public comment periods have dampened prospects for Ethereum ETF approval.

Ripple CEO Brad Garlinghouse and other industry figures have criticized the SEC's approach, highlighting concerns over the potential stifling of innovation and market confusion.

The stable odds on Polymarket reflect the complexity of cryptocurrency regulation, with the SEC's decision likely setting a precedent for future cryptocurrency-related financial products.

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Written by Silvia Pavlof

Silvia has explored various forms of writing, ranging from content creation for social media to crafting movie scripts. Drawing on her experience as a journalist specializing in the gambling sector, she is currently investigating the impact of cryptocurrencies and blockchain on traditional gambling and iGaming.

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