Asia's first Bitcoin spot ETF is coming? When will the Hong Kong BTC spot ETF be listed?

The U.S. Securities and Exchange Commission’s (SEC) approval of a Bitcoin spot ETF marks a new milestone for the crypto industry. After these "US stock traders" entered the market, Bitcoin ETFs received increasing attention and attracted a large influx of funds. According to data from BitMEX Research, net inflows into these 11 Bitcoin ETFs exceeded $2.27 billion last week alone (February 12 to February 16). This phenomenon shows that investor interest in Bitcoin ETFs continues to increase, and the market’s recognition of the cryptocurrency is also growing. This move not only promotes the development of the digital asset market, but also provides more institutional investors with a convenient way to participate in the cryptocurrency market. The successful launch of the Bitcoin ETF has brought more liquidity and transparency to the entire cryptocurrency industry, providing investors with more choices and opportunities. This also indicates that the cryptocurrency market will usher in more funds and attention, laying the foundation for the further development of the industry. It is worth noting that while these ETFs are attracting market funds, they are also continuing to invest in the Bitcoin market. Inject new capital. Bitcoin prices have risen more than 10% since the U.S. Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs on January 10.

On February 20, total net inflows into Bitcoin spot ETFs reached $137 million. GBTC had a single-day net outflow of $137 million, and other ETFs except Grayscale had a total net inflow of $274 million. Among them, BlackRock ETF IBIT had the largest single-day net inflow, reaching $154 million, accounting for 56% of the total single-day inflow. Trading volume for the Bitcoin spot ETF (excluding GBTC) hit $2 billion, a new high since its U.S. debut last month.

As of the close of trading on February 20, Bitcoin ETFs had more than $37 billion in total assets under management. Among the top three Bitcoin ETFs with assets under management, GBTC ranks first, with assets under management reaching US$23.567 billion; IBIT ranks second, with assets under management of US$5.68 billion; and FBTC ranks third, with assets under management to US$4.25 billion. The data demonstrates the widespread popularity of Bitcoin ETFs in the market, with investor interest in the space continuing to grow.

Now, Hong Kong has taken over the baton. Donald Day, chief operating officer of Hong Kong-based virtual asset exchange VDX, believes the SEC’s decision will prompt other peers to “seriously consider whether it is possible and wise to launch similar ETF products.” He pointed out that the Securities and Futures Commission’s announcement in December last year created conditions for issuers to launch spot crypto ETF products in Hong Kong.

We are getting closer and closer to Asia’s first virtual asset spot ETF being listed in Hong Kong.

Hong Kong is expected to list a BTC spot ETF in the first quarter

On the day the U.S. Securities and Exchange Commission approved the first Bitcoin spot exchange-traded fund (ETF), Wu Jie, a member of the National Committee of the Chinese People’s Political Consultative Conference and a member of the Legislative Council of Hong Kong Zhuang said Hong Kong should have the courage to become a leader in the field of virtual assets. Wu Jiezhuang pointed out that the Hong Kong Securities and Futures Commission has expressed its readiness to accept applications for spot Bitcoin ETFs, and the Hong Kong SAR government should promote this initiative as soon as possible. At the same time, he called for strengthening the popular education of virtual assets to improve the public’s understanding and awareness of this field.

The current Hong Kong Bitcoin Spot ETF is in the actual advancement stage.

Chen Peiquan, executive director of Victory Securities, a licensed virtual asset brokerage in Hong Kong, revealed that the United States allows spot ETFs to be listed, which is regarded by the encryption industry as the key to achieving a "connection" between virtual currencies and actual exchanges, which will inevitably lead to more investors participating. Go in. Many fund companies in Hong Kong are already intensively making preparations. It is expected that as soon as the first quarter of this year, many fund companies will express their willingness to apply, or even successfully apply.

In addition, Yibo Financial and Xinhuo Asset Management have publicly stated that they are preparing for ETF-related applications. Serra Wei, CEO of digital asset custody company Aegis Custody, revealed that the company is negotiating with four asset management companies to list spot encryption products in Hong Kong.

Currently, there are two BTC futures ETFs and one ETH futures ETF listed in Hong Kong, issued by Samsung Assets and CSOP. The former has publicly stated that it "does not rule out the possibility of exploring the launch of spot ETFs," while the latter revealed that it will observe market demand before considering it.

As Hong Kong gradually establishes and improves the encryption regulatory system and approves virtual asset futures ETFs, it already has the listing environment and conditions for Bitcoin spot ETFs. Luo Boren, head of securities product development at the Hong Kong Exchange, said that the Hong Kong Exchange is ready to seize the opportunities brought by thematic investment and will work closely with issuers and various stakeholders to smoothly introduce this new product into the Hong Kong ETF market.

Referring to the approval process of traditional ETFs, as long as the Bitcoin spot ETF application institution meets regulatory requirements in terms of redemption mechanism, custody method, risk control system, etc., it will be witnessed in Hong Kong in a matter of weeks or months at the earliest. Spot virtual asset ETF was born.

Opening a new era of virtual asset investment

Chen Peiquan pointed out that many investors have not dared to invest in virtual currencies. The main reasons include not adapting to new investment methods, or fear of thunderstorms on the investment platform. Virtual asset spot ETFs can solve these two major pain points: on the one hand, investors can participate in investments through familiar channels; on the other hand, the China Securities Regulatory Commission requires institutions that issue spot ETFs to use Hong Kong licensed platforms, and the platforms themselves also purchase insurance. Not only are investment risks protected, it will also benefit the development of Hong Kong’s virtual asset platforms and securities firms.

Although Hong Kong’s launch of BTC spot ETFs is slightly behind the United States, Hong Kong’s regulatory circular does not limit applications to BTC as a single subject. Therefore, Hong Kong is likely to expand the category of virtual asset ETFs in the future, including ETH. ETFs such as mainstream virtual assets may be the first to be listed in Hong Kong.

For market investors, the listing of virtual asset spot ETFs will significantly lower the threshold for participation, and in a protected environment, they can grasp the growth dividends of virtual assets without having to personally take charge of the assets on the chain.

For institutions such as asset management companies, securities firms, and funds, they can also seek business growth from the market growth of virtual asset ETFs and capture opportunities for differentiated customer acquisition and overtaking in corners through new business lines. Institutions that keenly grasp the development period of virtual assets from niche to mainstream and are stuck in the track can seize more traffic dividends brought by new assets.

For the virtual asset market, spot ETFs will continue to draw funds from traditional financial markets and are expected to usher in a new growth cycle.

Currently, the asset management scale of three virtual asset futures ETFs in Hong Kong is approximately HK$384 million, showing that virtual assets already have a certain market in Hong Kong. With improved supervision, rich products, and participating institutions and investors With the increase, Hong Kong virtual asset spot ETF is expected to become the main channel for Asian capital inflows.

In view of the fact that the AUM of many Hong Kong-funded and Chinese-funded Hong Kong subsidiaries financial institutions has reached hundreds of billions of dollars, 1% of the virtual asset allocation will be for the virtual asset market bring huge increments. It is expected that the capital scale of Hong Kong virtual asset spot ETFs is expected to reach tens of billions of dollars in the next few years. Hong Kong, with its open policies, will lead a new era of virtual asset investment.

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