Spot Bitcoin, Ether ETFs Get Official Approval in Hong Kong; ‘Potential Fee War’ Unfolding, Says Analyst

In simple terms, Hong Kong’s regulatory body has given the green light to the initial group of crypto exchange-traded funds (ETFs), making it a pioneering moment for Hong Kong and potentially positioning it as the foremost digital asset hub in Asia, fueling more expansion within the sector.

The Securities and Futures Commission (SFC) approved three applications for bitcoin and ether ETFs from Harvest Global Investments, China Asset Management (ChinaAMC), and a partnership between Bosera Asset Management and HashKey Capital, as indicated on the SFC’s website.

According to Bloomberg Intelligence analyst Eric Balchunas, announced on Wednesday, these funds may begin trading as early as April 30. He further mentioned that the management fees turn out to be less expensive than initially anticipated.

James Seyffart, a senior ETF analyst at Bloomberg Intelligence, pointed out a possible fee battle emerging among issuers. Harvest is currently forgoing charges for the first half year. Subsequently, it will levy a management fee of 0.3% for both its Bitcoin and Ethereum funds. This fee is less than Bosera-Hashkey’s 0.6% and ChinaAMC’s 0.99%, making Harvest’s offer more attractive in terms of fees.

After U.S. regulators gave their go-ahead three months ago for the first bitcoin exchange-traded funds (ETFs) based on spot Bitcoin, this was a significant milestone for the crypto industry. The expanded investor base for the largest and oldest cryptocurrency, Bitcoin, and its market influence have been a hot topic for months. BlackRock, a global asset management giant, spearheaded the launch of these funds which have attracted over $12 billion in net inflows since then. This influx of capital helped push Bitcoin’s price to a new all-time high above $73,000 just last month.

Crypto ETFs listed in Hong Kong’s stock exchange are an important move towards making cryptocurrencies more convenient for traditional investors worldwide. However, experts believe that the influence may not match the achievements of U.S. counterparts, according to CoinDesk’s earlier reports.

Players with approved products in Hong Kong hold considerable influence in the regional market. However, they pale in comparison to their U.S. competitors, some of which manage assets worth several trillion dollars.

At the close of the previous year, China Asset Management reportedly managed assets valued at approximately $266 billion based on their website information. In comparison, Harvest Global Investments’ asset under management were around $207 billion as per their website data.