Hong Kong Stock Exchange has listed spot funds based on BTC and ETH

What’s new? The Hong Kong Stock Exchange (HKEX) was the first in Asia to list spot funds (ETFs) based on virtual assets. Three bitcoin funds and three Ethereum funds, managed by China Asset Management, Harvest Global, and Bosera in conjunction with the operator of Hong Kong’s first licensed crypto exchange, HashKey, are available on the platform.

Press release

What else is known? HKEX officials note that the launch reinforces the city’s position as the region’s leading ETF marketplace, empowering investors and enhancing liquidity. “We look forward to continue working closely with our stakeholders with a view to launching more products to our international marketplace,” the company emphasized.

As noted by analyst Colin Wu, the new products are also available to non-residents of Hong Kong. They will be able to buy fund shares upon meeting local regulatory requirements, such as passing due diligence. However, mainland Chinese residents are prohibited from investing in crypto products due to industry restrictions in place from 2021.

Products available on the platform include Bosera HashKey Bitcoin ETF (3008.HK), Bosera HashKey Ether ETF (3009.HK), ChinaAMC Bitcoin ETF (3042.HK), ChinaAMC Ether ETF (3046.HK), Harvest Bitcoin Spot ETF (3439.HK), and Harvest Ether Spot ETF (3179.HK).

Bitcoin momentarily rose above $64 500 amid the launch, but corrected to $63 140 at the time of writing. Ethereum rose to $3245 but then fell back to $3158.

HKEX launched its first crypto futures funds at the end of 2022. In Q1 2024, net inflows into three such funds totaled $529 million and the combined average daily turnover reached $51,3 million, up from just $8,9 million a year earlier.

Bloomberg analyst Eric Balchunas does not expect significant inflows into Hong Kong spot crypto ETFs in the medium term due to the specifics of the local market.

In the United States, ETH-based spot funds have yet to receive approval from the securities regulator, while bitcoin ETFs have been trading since January 11 this year. The net inflow of funds for ten such products exceeded $12 billion.

In turn, the Australian Securities Exchange (ASX) is also preparing to launch spot bitcoin funds by the end of this year, as reported by the media citing anonymous sources.