H.K. Seen Approving Bitcoin, Ether ETFs as Soon as Monday

Bloomberg News, Bloomberg News

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(Bloomberg) -- Hong Kong may approve exchange-traded funds investing directly in both Bitcoin and Ether, the two dominant cryptocurrencies, as soon as Monday, according to people familiar with the matter.

An international arm of Chinese asset manager Harvest Fund Management Co., as well as a partnership between Bosera Asset Management (International) Co. and HashKey Capital are among the issuers expected to get the green-light for both types of spot-crypto ETFs, the people said, asking not to be identified because the information isn’t public.

Both firms intend to launch the ETFs at the end of the month, once given the go-ahead by the Securities and Futures Commission and after finalizing listing details with Hong Kong Exchanges & Clearing Ltd., the people said.

The nod from regulators could come as early as Monday, the people added, noting that the timeline isn’t fixed and remains subject to last-minute changes.

Spokespeople for the SFC and Harvest declined to comment. HashKey and Bosera didn’t immediately respond to requests for comment. “HKEX is committed to supporting the continued growth and development of its vibrant ETF ecosystem,” a spokesperson for the exchange said. “We will update the market should there be new developments.”

The anticipated approvals follow reports earlier this week that Harvest was poised to get permission to launch a spot-Bitcoin ETF in the city. The SFC granted Harvest and China Asset Management clearance to provide virtual-asset related fund management services on April 9. A spokesperson for China Asset Management declined to comment on the authorization.

The advent of spot Bitcoin ETFs in the US on Jan. 11 has helped spark a resurgence in crypto markets this year. The 11 ETFs have collected about $59 billion in assets so far, lifting the token they track to a record $73,798 in mid-March. In just three months, BlackRock’s iShares Bitcoin Trust alone has topped $15 billion in net inflows. Bitcoin was trading at $70,800 as of 12:15 p.m. in London on Friday.

Hong Kong is vying with Singapore and Dubai to establish itself as a hub for digital-asset firms. The city rolled out a regulatory regime for virtual-asset service providers in June 2023 and has so far approved platforms operated by HashKey Group and OSL Digital Securities.

Regulators in the city had already permitted the launch of futures-based crypto ETFs. The three products listed — CSOP Bitcoin Futures, CSOP Ether Futures and Samsung Bitcoin Futures — have combined assets of about $170 million.

Hong Kong’s crypto charm offensive hit a snag last year in the form of JPEX, an unlicensed crypto exchange responsible for an alleged HK$1.6 billion ($200 million) fraud. But authorities continue to woo crypto entrepreneurs in the hope of restoring some of the city’s luster as a global business center.

(Updates with HKEX comment in paragraph five.)