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With the debut of spot bitcoin and ethereum exchange-traded funds (ETFs) in Hong Kong trading on Tuesday, market observers are speculating about the potential demand for these ETFs in the region, reminiscent of the enthusiasm seen in the U.S. following the approval of 11 spot bitcoin ETFs on Jan. 10. Zhu Haokang, head of digital asset management and family wealth at China Asset Management (China AMC), anticipates that the initial trading day could surpass the record-high volumes experienced in the United States.
Hong Kong Bitcoin ETF Launch Could Surpass U.S. Records, Says Zhu Haokang
Beijing’s Foresight News recently published an interview with China AMC executive Zhu Haokang and Wayne Huang, the Head of ETF and custody business at OSL. The China AMC executive believes that his firm’s fund will be the largest issuer among the three in terms of size and this will be revealed when trading begins. “There will be an announcement at HKEX tomorrow morning at 9:30,” OSL executive Huang confirmed.
Haokang was questioned about the distinctions between the executive’s fund and its competitors. “The first difference is that, unlike the U.S. Bitcoin spot ETF, we have spot and physical subscription and redemption,” the China AMC executive said. “Additionally, Huaxia’s products differ from the other two in two ways: Huaxia Fund’s Hong Kong spot ETF is the only one with counters in Hong Kong dollars, U.S. dollars, and renminbi. Secondly, besides the listed shares, we have unlisted shares. These are features the other two do not have.”
Huang explained to the reporter that offering a physical subscription represents an innovation for Hong Kong ETFs in comparison to U.S. ETFs. “It first requires the brokerage company to upgrade its license to handle virtual asset transactions. Investors send coins to OSL through this broker, and finally, transfer the equity back into the fund’s custody account to complete the entire physical subscription process,” the OSL executive noted.
Furthermore, correspondence sent to Bitcoin.com News from executives from Hashkey Capital and Bosera, explained that non-Hong Kong residents are eligible to invest in the Bosera Hashkey bitcoin and ether spot ETFs if they comply with Hong Kong’s regulatory standards, including customer due diligence requirements. This update arrives amid anticipations that Hong Kong’s ETFs might attract significant investment from mainland China.
“A likely approval of Hong Kong-listed bitcoin Spot ETFs could attract several billion dollars of capital as mainland investors take advantage of the Southbound Connect program,” Matrixport asserted three weeks ago. However, Bloomberg’s senior ETF analyst Eric Balchunas remarked two weeks ago that his team estimates they would be “lucky to get” total flows of about $500 million.