According to a recent Reuters report, Hong Kong is on the verge of becoming Asia’s first city to launch spot Bitcoin ETFs. Notably, the initial approvals for these ETFs are expected to be announced as early as next week, which is significantly ahead of industry expectations for such launches this year. 

Hong Kong’s Bid For Revival

Per the report, the move to introduce spot Bitcoin ETFs comes as Hong Kong seeks to revive its status as a prominent financial center, in which pandemic-related restrictions have somewhat diminished, China’s economic slowdown, and tensions between China and the United States. 

By embracing cryptocurrency investment vehicles, Hong Kong aims to attract fresh global investment and drive crypto adoption to new heights.

Adrian Wang, CEO of Hong Kong-based crypto wealth manager Metalpha, emphasized the significance of introducing Bitcoin ETFs in Hong Kong, pointing out the potential for increased global investment and broader adoption of cryptocurrencies. 

This move follows the success of the United States, which launched the first US-listed spot Bitcoin ETFs in January and attracted approximately $12 billion in net inflows, as previously reported by Bitcoinist.

While the Hong Kong Securities and Futures Commission (SFC) and the three Chinese companies declined to comment on the matter, China Asset Management and Harvest Fund Management’s Hong Kong units have recently obtained approval from the SFC to manage portfolios with investments exceeding 10% in virtual assets. 

These parent companies are prominent mutual fund firms in China, each managing assets exceeding 1 trillion yuan ($138 billion).

Bitcoin Futures Success Fuels Interest In Spot Bitcoin ETFs

Cryptocurrency trading is prohibited in mainland China. Nevertheless, offshore Chinese financial institutions have shown a keen interest in participating in developing crypto assets in Hong Kong. 

The city had previously approved ETFs for cryptocurrency futures in late 2022, with the CSOP Bitcoin Futures ETF being the largest one. It has amassed around $120 million in assets under management, a sevenfold increase since September 2023.

In addition to the asset managers mentioned, Hong Kong-based Value Partners has expressed its exploration of launching a spot Bitcoin ETF, although it has not disclosed whether an official application has been submitted. 

Furthermore, at least four mainland Chinese and Hong Kong asset managers, including China Asset Management, Harvest Fund Management, and Bosera Asset Management, have submitted applications to launch spot Bitcoin ETFs.

As the regulatory landscape evolves, the introduction of spot Bitcoin ETFs in Hong Kong is expected to pave the way for greater investment opportunities and contribute to the growth and maturation of the global cryptocurrency market.

At the time of writing, the leading cryptocurrency in the market has witnessed significant price volatility. It approached its current all-time high on Monday and reached a peak of $72,600. However, it encountered higher-level resistance, declining to the $67,600 range. This represents a 3.5% decrease over the past 24 hours alone.

Featured image from Shutterstock, chart from TradingView.com