The New Hong Kong-based Spot Bitcoin and Spot Ethereum ETFs Being Launched on April 30: All You Need to Know

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As a researcher with experience in the cryptocurrency market, I find ChinaAMC’s upcoming launch of their Spot ChinaAMC Bitcoin ETF and Spot ChinaAMC Ethereum ETF to be an exciting development for Asia. The company’s confidence in surpassing the trading volume of US Bitcoin spot ETF issuers on the first day of listing is noteworthy, especially with the unique features of their offerings, such as the ability to offer spot and physical subscriptions and redemptions, and the availability of Hong Kong dollar, US dollar, and RMB counters.

In a groundbreaking move for Asia’s cryptocurrency sector, ChinaAMC (Hong Kong) Limited hosted a press conference on April 29. The objective was to unveil the upcoming launch of their Bitcoin and Ethereum Spot ETFs – set to debut at 1:30 a.m. UTC on April 30 or 9:30 a.m. Hong Kong time on the same day. During this “Asia Premiere” event, attendees gained precious information regarding ChinaAMC’s aspirations and the distinctive characteristics of these ETFs.

As an analyst, I’d rephrase it as follows: Based on a report from Foresight News, I, Zhu Haokang, the head of digital asset management and family wealth at ChinaAMC in Hong Kong, am optimistic that our virtual asset spot ETFs will see trading volumes exceeding the $125 million mark achieved by the ten US Bitcoin spot ETF issuers on their first day of listing earlier this year. Our goal at ChinaAMC is to set a new record for the highest trading volume on the first day among the three ETF issuers in Hong Kong.

Wayne Huang, the head of OSL’s ETF and custody business, announced that OSL had successfully raised funds during its inaugural day with two participating parties, namely ChinaAMC and another undisclosed fund. Notably, these transactions surpassed the initial capital inflow experienced by the U.S. Bitcoin spot ETF upon its market debut.

One significant distinction between ChinaAMC’s spot Exchange-Traded Funds (ETFs) and those in the United States lies in their subscription and redemption features. While US spot Bitcoin ETFs do not provide spot deliveries or physical settlement, ChinaAMC’s Hong Kong spot ETFs offer this capability. Furthermore, these ETFs are unique as they come with counters denominated in Hong Kong dollars, US dollars, and Renminbi (RMB), making them the only ones of their kind in Hong Kong. Another notable feature is that they issue both listed and unlisted shares, setting ChinaAMC apart from other issuers in the region.

A diverse group of investors, including Bitcoin miners and those from regions without virtual asset ETFs like Singapore and the Middle East, are drawn to the introduction of these ETFs in Hong Kong. They can easily buy Bitcoin spot ETFs using their Bitcoin holdings. The allure extends to American investors, attracted by Hong Kong’s unique cash and physical subscription model and trading hours. Several Asian and international family offices have also signaled their intent to invest in crypto spot ETFs.

In Hong Kong, a trailblazing service called “Physical Subscription” enables investors to send their cryptocurrencies to OSL via a brokerage firm. The brokerage firm subsequently transfers the equated shares to the fund’s safekeeping account at OSL. To ensure security and compliance with anti-money laundering regulations, investors must establish an account with OSL through a brokerage firm and undergo whitelist verification for their digital wallets. Only verified wallets with no questionable past transactions can transfer coins.

As a researcher studying the investment landscape in Hong Kong, I’ve discovered that while mainland Chinese investors are currently restricted from investing in cryptocurrency spot Exchange-Traded Funds (ETFs) based in Hong Kong, there are other categories of investors who can participate. These include qualified investors, institutional investors, retail investors, and international investors who meet the relevant regulations.

With regard to the possible consequence of the US classifying Ethereum as a security, Wayne Huang stressed that this decision would not influence Hong Kong’s Ethereum spot ETF, given that the Hong Kong Securities and Exchange Commission has distinct regulations for determining if a virtual asset qualifies as a security and is eligible for retail investment.

At present, just Bitcoin and Ethereum satisfy the necessary requirements for introducing ETFs (Exchange-Traded Funds) in Hong Kong. Nevertheless, ChinaAMC and OSL are currently holding talks with the China Securities Regulatory Commission regarding the potential listing of additional cryptocurrencies within compliance transactions in Hong Kong.

As a crypto investor, I’m excited about ChinaAMC’s plans to introduce innovative financial products related to their ETFs in collaboration with investment banks and securities firms. These new offerings could include inverse leverage and derivatives, which have the potential to significantly impact the cryptocurrency market.

Although ChinaAMC charges higher fees than its Hong Kong counterparts, I believe in the competitive edge of its investment products. The company prides itself on adhering to the rigorous thematic and complex Exchange-Traded Fund (ETF) standards in Hong Kong. Furthermore, it offers flexibility in trading options and recognizes the significance of robust risk management and operational stability given the intricacy and novelty of its offerings.

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2024-04-29 19:34