It is rumored that Hong Kong will allow Bitcoin spot ETFs to be purchased and redeemed in kind! Release as soon as Q2

This site (120btC.coM): The Hong Kong Securities and Futures Commission (SFC, later referred to as the Securities and Futures Commission) may allow Bitcoin spot ETFs to be traded in kind in the second quarter of this year ( In-kind) for subscription and redemption.

The Hong Kong Securities and Futures Commission (SFC) issued a circular in December this year, indicating that it is ready to accept applications for fund recognition such as cryptocurrency spot ETFs. Harvest Global, an asset management company in mainland China, subsequently applied for a Bitcoin spot ETF in January this year, and another company, Venture Smart Financial Holdings, also said it would apply.

According to Bloomberg ETF analyst Rebecca Sin, although no spot ETF has been approved so far, it is obviously only a matter of time. In addition to the possible approval of these products, the analyst said that the Hong Kong Securities and Futures Commission will also allow physical redemptions, which is a major difference from the US Bitcoin spot ETF which can only be redeemed in the form of cash.

"In-kind Creation/Redemption (In-kind Creation/Redemption) allows investors to directly purchase Bitcoin ETFs with Bitcoin, and these Bitcoin assets will be directly exchanged for Bitcoin spot ETF shares of equal value. , Bitcoin is also redeemed when redeeming; in contrast, the "Cash Creation/Redemption" model adopted by the U.S. Bitcoin spot ETF, investors must use cash to buy the Bitcoin ETF and redeem it Also get cash back. "

ETF products increasingly use physical redemption because the underlying assets will not necessarily be sold. Therefore, considering costs, taxes and liquidity shortcomings, investors and issuers prefer Use this method.

Conversely, a cash redemption can also represent a number of shares of an ETF that can only be traded in cash, often incurring costly taxes and transaction costs.

Noelle Acheson is the author of "Cash Macro". She pointed out that if Hong Kong does approve the subscription and redemption of Bitcoin spot ETFs, it would be "big news." She said: In terms of transaction volume, Asia's The cryptocurrency market is much larger than the United States. This may mean either that less "new money" is entering the ecosystem, or that there is greater interest in crypto assets in Asia, and ETFs listed in Hong Kong can bring a large amount of money into an "approved" investment portfolio.

Noelle Acheson said: "Even a small proportion of Chinese investors find that there are legal channels to invest in Bitcoin, which will be very important."

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