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Hong Kong approves first spot Bitcoin and Ethereum ETFs

Hong Kong’s Securities and Futures Commission (SFC) has given the green light to the region’s first spot Bitcoin and Ethereum exchange-traded fund (ETF), according to an official announcement.

Several official statements from well-known financial institutions such as China Asset Management, Harvest Global Investments, Boshi International and HashKey Capital confirmed this significant development. It was previously reported that Singapore-based cryptocurrency services provider Matrixport noted that the investment vehicle could unlock up to $25 billion in demand from Chinese investors through the Southbound Stock Connect scheme, which allows qualified mainland Chinese investors Buy eligible stocks listed in Hong Kong.

Hong Kong company to launch cryptocurrency ETF

The China Securities Regulatory Commission has granted the Hong Kong subsidiary of China Asset Management the right to provide digital asset management services to investors. The company plans to cooperate with digital asset platform OSL Digital Securities and BOCI-Prudential Trustee Limited (BOCI-Prudential Trustee Limited) to launch ETF products linked to spot Bitcoin (BTC) and Ethereum (ETH) as a custodian . Previously, VanEck CEO Jan van Eck recently expressed doubts about the U.S. Securities and Exchange Commission’s (SEC) approval of a spot Ethereum exchange-traded fund (ETF) in May.

Similarly, Harvest Global Investments has received in-principle approval from the Securities and Futures Commission for two spot cryptocurrency ETFs, which will be issued in partnership with OSL. The company believes these new products will effectively address issues such as high margin requirements, price premiums caused by the absence of short sellers, and losses caused by rolling positions, providing investors with a more accurate reflection of the immediate value of Bitcoin.

Boshi International and HashKey Capital have also reportedly been approved to offer Bitcoin and Ethereum ETFs, with the two companies announcing a strategic collaboration on April 6 during the 2024 Hong Kong Web3 Festival.

Market reacts positively to ETF approval

The cryptocurrency market reacted positively to news of the ETF’s approval. Bitcoin prices have rebounded and are currently trading at $66,321, up 2.4% from the previous day, according to CoinMarketCap. The announcement also boosted the price of Ethereum, which is trading at $3,250 at the time of writing, up 5.2% in the past 24 hours.

The approval of Hong Kong’s spot Bitcoin and Ethereum ETFs marks a major milestone in mainstream adoption of cryptocurrencies and is expected to attract more institutional investors into the digital asset space. As the first jurisdiction in Asia to approve such a product, Hong Kong positions itself as a leader in the rapidly evolving world of digital finance.

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