Hong Kong’s Securities and Futures Commission (SFC) has officially approved several spot Bitcoin and Ethereum exchange-traded funds (ETFs) to begin trading on April 30.

This includes offerings from ChinaAMC, Harvest and Bosera HashKey. The ETFs will provide both retail and institutional investors with regulated investment opportunities in these cryptocurrencies.

Earlier, on April 15, Hong Kong announced the conditional approval of its first Bitcoin and Ether exchange-traded funds (ETFs).

Key Details on the ETFs

The ChinaAMC and Harvest Global Investments ETFs have partnered with OSL as a sub-custodian. OSL has indicated that the regulatory vetting process is almost complete and they are preparing intensively for the launch. Bosera Asset Management will manage its ETF in collaboration with HashKey Capital.

Unlike the cash-creation model used by U.S. spot Bitcoin ETFs, Hong Kong will utilize an in-kind creation model. This model allows for the creation of new ETF shares using actual BTC and ETH. 

According to Bloomberg ETF analyst Rebecca Sin, this approach could significantly increase assets under management and trading volumes.

Market Impact and Fee Competition

The introduction of these ETFs is expected to spark a fee competition among issuers, as suggested by Bloomberg’s James Seyffart. 

Harvest, for instance, plans to attract investors by offering the lowest fees, starting at 0.3% post-waiver. This competitive fee structure is expected to make the new ETFs highly attractive to investors.

The approval marks a significant step towards more progressive cryptocurrency regulations in Hong Kong and potentially across the region. While it remains unclear if mainland Chinese investors will have access to these ETFs soon, such a move could signal regulatory changes.