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Hong Kong’s first spot bitcoin and ether ETFs get conditional approval as city stakes a lead on such products

  • Bosera Asset Management, HashKey Capital, Harvest International and ChinaAMC are all working on spot crypto ETFs after the SFC’s first conditional approvals
  • The inclusion of an ether ETF gives Hong Kong a lead among major finance hubs, as the US has been delaying a decision on such products

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Hong Kong has given conditional approval to its first spot bitcoin and ether exchange-traded funds, paving the way for the sale of financial instruments that invest directly in cryptocurrencies. Photo: Shutterstock
Xinmei Shen

Hong Kong has approved preparations for the launch of exchange-traded funds (ETF) that invest directly in bitcoin and ether, the world’s two largest cryptocurrency tokens, as the city looks to secure a leading position in the volatile virtual asset sector.

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Mainland Chinese fund house Bosera Asset Management’s overseas arm and Hong Kong virtual asset firm HashKey Capital received “conditional approval” from the Securities and Futures Commission (SFC) to jointly launch spot crypto ETFs, the companies said in announcements published online on Monday.

Chinese fund managers Harvest International and China Asset Management Company (ChinaAMC) are also among those to receive a green light, according to Chinese media outlet Caixin. ChinaAMC announced that it was working on those ETF products after receiving SFC approval to provide virtual asset management services.

The SFC, which first published rules for allowing spot crypto ETFs in December, was widely expected to approve spot bitcoin ETFs this week. The inclusion of spot ether ETFs makes it the first market in Asia, and the first global finance hub, to approve such a product. The US Securities and Exchange Commission (SEC) in January approved spot bitcoin ETFs, but it has delayed a decision on similar ether products.

The SFC has not made any announcement on the ETFs, as none have been officially approved yet. The conditional approval allows applicants to move forward with preparations to offer the funds, such as applying to Hong Kong Exchanges and Clearing (HKEX) to offer them on the local stock exchange.

“The SFC issues a conditional authorisation letter to an ETF application if it generally satisfies our requirements, subject to various conditions, including fee payments, filing of documents and HKEX’s listing approval,” the SFC said in a statement to the Post, without clarifying the status of any spot crypto ETF applications.

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Spot crypto ETFs are considered a boon for investors who want exposure to such assets without needing to worry about setting up their own blockchain wallets or other technical details that can be a hurdle. ETFs can also be included in things like retirement funds, making them more appealing to mainstream investors.

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