Venture Smart Financial Holdings Ltd. (VSFG), a prominent financial services firm headquartered in Hong Kong, is gearing up to launch a spot bitcoin exchange-traded fund (ETF) as early as May.

Brian Chan, the group head of investment and products at VSFG, disclosed that the team is actively engaged in discussions with the Securities and Futures Commission (SFC) of Hong Kong to bring the Bitcoin ETF to reality. 

While the target launch month is May, the team remains flexible, considering a June launch as a fallback option to deal with potential regulatory hurdles.

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VSFG and Value Partners Join Forces

VSFG has partnered with Value Partners, a leading asset manager, to spearhead the initiative of launching a spot Bitcoin ETF. 

The move by VSFG comes in the wake of regulatory shifts in Hong Kong, signaling a growing acceptance of cryptocurrency-based investment vehicles. In December 2023, Hong Kong regulators expressed readiness to consider applications for spot crypto ETFs, paving the way for VSFG's ambitious venture.

The SFC approved Harvest Global Investments' application for a bitcoin exchange-traded fund (ETF) in January. According to local reports, a total of 10 financial institutions plan to launch bitcoin ETFs in Hong Kong.

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Potential for In-Kind Creations and Redemptions

According to Bloomberg Intelligence, the SFC is likely to allow the creation and redemption of spot bitcoin ETFs in the second quarter. This feature, exclusive to the Hong Kong market, is expected to enhance assets under management (AUM) and trading volume, leading to a win-win situation for all stakeholders involved.

“Meanwhile, the approval would not only benefit ETF issuers but also the HKEx and VATPs and qualified Participating Dealers in Hong Kong, creating a win-win situation,” said Brian Chan, group head of investment and products of VSF, in a n interview with The Block.

With the impending launch of the Bitcoin ETF, VSFG aims to democratize access to cryptocurrency investment opportunities, catering to a diverse range of investors in Hong Kong and beyond.