Hong Kong opens to coins… Is it a funding channel for Asian institutions?
South Korea bans Bitcoin spot ETFs
Hong Kong, the gateway to China’s economic opening, is attracting attention as it is expected to be the next country to approve Bitcoin spot exchange-traded fund (ETF) after the United States. This is because funds from major Asian institutional investors can flow into the virtual asset market through the Hong Kong spot ETF. Furthermore, if China’s bar blocking virtual assets is lifted, it is expected to expand into a large-scale good news.
According to the industry on the 19th, there is speculation that Hong Kong will approve a virtual asset spot ETF within two months at the earliest. It is highly likely that Hong Kong, which is considered a major virtual asset hub along with Singapore, will be the first in Asia to approve a Bitcoin spot ETF, following the United States.
◆Hong Kong is active in coins… “ETF application ready”
There are two reasons for the observation. First of all, Hong Kong is open to virtual assets, including support for related companies. Hong Kong, which had previously implemented a policy of suppressing virtual assets in line with China, announced the opening of the coin market by allowing individual investor transactions in May last year. Previously, only professional investors with portfolios worth more than $1 million or in the top 7% could directly invest in coins, but now ordinary individual investors can also trade coins.
It is also supported by the strong will of local authorities. The Hong Kong Securities and Futures Commission (SFC) has already been preparing to support spot ETFs independently of applications from management companies since last year. In a recent statement, they directly stated, “We are ready to receive approval applications for virtual asset spot ETFs.”
Livio Weng Hashiki, Chief Operating Officer (COO), said in an interview with China’s Caixing on the 10th (local time), “About 10 funds based on capital from various regions such as China, Asia, and Europe are launching virtual asset spot ETFs in Hong Kong. “We are exploring the possibility of introducing it,” he said. “Officials from 7 to 8 of them have already contacted SFC and formed an investment product design team.”
Victory Securities Executive Director Chen Feiquan said through local media outlet Oneweipo on the 12th (local time), “Hong Kong is expected to launch a virtual asset spot ETF as early as the first quarter of this year.” He added, “The Hong Kong financial sector is also expected to support the U.S. Bitcoin spot ETF.” We are paying attention to ETF listings. “Following this listing, many local brokers will apply for a virtual asset trading license,” he said. Victory Securities is a Hong Kong virtual asset brokerage.
Arthur Hayes, co-founder of BitMEX, said, “Spot ETFs will also appear in major Asian financial markets such as Hong Kong,” and added, “In the future, many inefficiencies will arise between highly regulated financial markets and existing virtual asset exchanges, creating more profit opportunities.” “He predicted.
The local National Assembly is also demanding the introduction of a virtual asset spot ETF. Hong Kong lawmaker Johnny Ng said on the 10th (local time) through He emphasized, “We need to quickly prepare related policies and secure a global presence.”
◆Great news for coiners
If Hong Kong launches Asia’s first Bitcoin spot ETF as expected, it is highly likely that it will be a huge boost following the US ETF. This is because while U.S. ETFs collect institutional funds from the U.S., Hong Kong ETFs can absorb institutional funds from Asia. This means that the overall virtual asset market size is expanding.
Ki-young Ki, CEO of CryptoQuant, said, “Eventually, traditional offshore financial institutions active in the global market will also enter the virtual asset market through exposure to spot ETFs.”
Furthermore, it may lead to changes in China’s virtual asset policy in the future. In fact, economic integration between Hong Kong and China has steadily increased since China’s reform and opening up in 1978. The opening of the Chinese coin market is a major positive news among coiners.
Changbae Yoon, an analyst at the Upbit Investor Protection Center, said, “China has been using Hong Kong as a gateway for foreign capital inflow by connecting it with the Shanghai and Shenzhen stock exchanges through the Hugangtong (2014) and Shenzhen (2016) exchanges.” “It maintains this independent financial and legal system, but given its role as a gateway to China’s economic opening, changes in Hong Kong’s virtual asset policy are likely to lead to changes in China’s virtual asset policy in the future.”
Meanwhile, domestic financial authorities currently prohibit the issuance and brokerage of Bitcoin spot ETFs. Bitcoin futures ETF trading is allowed as is currently the case as controversy intensifies.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.