Spot Bitcoin ETF approvals in the US inspires ambition among Hong Kong industry insiders

• Hong Kong industry insiders are pushing regulators to approve spot cryptocurrency exchange-traded funds (ETFs).
• It comes after the US approved spot Bitcoin ETFs, reinvigorating the Asian state’s desire to become Asia’s’ major virtual-asset hub.
• The city’s SFC revealed plans to authorize retail access to spot virtual asset ETFs in December 2023, and may follow through soon.

Spot Bitcoin exchange-traded funds (ETFs) have been the driving theme in the US market over the past few months, with the climax happening on January 10. Thus was when the US Securities and Exchange Commission (SEC) approved all eleven investment products to launch, with trading kicking off on January 11.

Also Read: Grayscale outflows near $600 million on trading day 3 as GBTC holders leverage spot BTC ETF approvals

Hong Kong industry insiders want a spot crypto ETF of their own

As it happens, the global community was monitoring the developments in the US Spot BTC ETF campaign from the sidelines, with Hong Kong now calling for a similar investment product of their own. Local media reports that industry insiders are pushing“local regulators to step up approvals to strengthen the city’s competitiveness in the global cryptocurrency market.”

Specifically, and in line with the city’s ambition to become a major virtual asset hub in Asia, Hong Kong insiders want to have spot cryptocurrency ETFs approved so that like the US market, they too can gain exposure to virtual assets without directly buying any crypto tokens. The city’s regulators could be moved to do so after the landmark approvals in the US.

Citing the co-founder and chief executive of digital asset custody solutions provider Cobo, Mao Shixing, alias “Discus Fish”

[Hong Kong needs to launch spot virtual asset ETFs as soon as possible to] ensure that the city remains competitive in the global cryptocurrency market and strengthen its position as a global financial center.

Notably, the Hong Kong Securities and Futures Commission (SFC) had demonstrated preparedness to authorize retail access to spot virtual asset ETFs in December 2023.  Among industry insiders that push for this development is the head of quantitative investment at CSOP Asset Management, Wang Yi, whose firm currently runs two cryptocurrency futures ETFs.

In a January 10 interview on Chinese media Caixin’s Livio Weng, chief operating officer at crypto trading app operator HashKey Group, revealed that around 10 fund management firms are preparing to launch spot virtual asset-backed ETFs in Hong Kong, with up to eight of these players already at an “advanced stage” to launch.

CoinGecko, a market analytics firm, indicates that besides the US, there are now eight markets global allowing spot crypto ETF operations. These include Canada, Germany, Switzerland, and tax havens like the Cayman Islands in the Caribbean and Jersey near the coast of northwestern France. According to Mao, the US approvals could influence other jurisdictions as “the SEC is one of the most influential and reputable financial regulators in the world.”

Mao also highlighted that the SEC’s initiatives “often serve as important references for financial regulators in other countries and regions," with chief operating officer at digital asset platform VDX, Donald Day corroborating that the SEC’s decision would make its peers “seriously consider whether similar ETFs would be permissible and desirable."

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