Seven spot ETFs are already in full-scale preparations
Livio Wen, chief operating officer of cryptocurrency exchange HashKey, said about 10 companies have begun considering launching virtual currency spot ETFs (exchange traded funds) in Hong Kong. Local media Caixin reported on the 10th.
Wen said about 10 companies, including fund managers backed by Chinese capital, as well as fund managers from Asia and Europe, are considering introducing physical ETFs in Hong Kong.
He added that about seven or eight of them have already contacted the Hong Kong Securities and Futures Commission (SFC) and are forming teams to start designing investment products.
Last December, Hong Kong SFC announced that it was ready to accept applications for a virtual currency spot ETF. At this time, several requirements regarding ETFs were set out, such as handling only tokens listed on virtual currency exchanges approved by the SFC.
connection: Hong Kong to accept applications for virtual currency spot ETF
In the United States, the Securities and Exchange Commission (SEC) finally approved a Bitcoin (BTC) spot ETF on the 11th Japan time, and momentum is increasing in the industry.
All 11 Bitcoin ETFs listed, SEC approved for the first time in U.S. history https://t.co/sV8vzOMvEX
— CoinPost (virtual currency media) (@coin_post) January 10, 2024
Investors will be able to invest in the value of Bitcoin without having to purchase it directly. Furthermore, it is expected that the virtual currency market will mature and its recognition will increase.
connection: All 11 Bitcoin ETFs listed, SEC approved for the first time in U.S. history for spot ETFs
What is Bitcoin ETF?
An Exchange Traded Fund that includes Bitcoin as an investment. An investment trust is a financial product that collects money from investors into a single fund and invests it in stocks, bonds, etc. The system is such that the investment results are distributed according to each investor’s investment amount. Among investment trusts, ETFs are listed on stock exchanges, so they can be bought and sold just like stocks.
▶️Virtual currency glossary
Possibility of Ethereum spot ETF next
Stephen McClurg, chief investment officer at US cryptocurrency investment firm Valkyrie, mentioned the possibility that physical ETFs such as Ethereum (ETH) could be approved next.
Seven companies have already applied for an Ethereum spot ETF, and Standard Chartered Bank, a major British financial institution, has expressed its own opinion that it may be approved in the second quarter of 2024 (April to June).
connection: “I wouldn’t be surprised if a physical ETH or XRP ETF is launched in the U.S. next,” says Valkyrie’s CIO.
It will be interesting to see when Hong Kong will approve physical ETFs for virtual currencies such as Bitcoin and Ethereum.
Since June last year, Hong Kong has allowed individual investors to trade virtual currencies and has put in place related regulations. In December, it announced a consultation document regarding the introduction of regulations for stablecoin issuers, and proposed a licensing system for stablecoin issuers.
connection: Hong Kong Monetary Authority announces draft regulations for stablecoin issuers
Learn about Bitcoin ETFs from the beginning: Explaining the advantages and disadvantages of investing and how to buy US stocks