How China Does Not Want to Miss Out on the Bitcoin ETF News in HK

Hong Kong Reportedly Weighs Crypto ETF Launch

The cryptocurrency community is abuzz with news that the Hong Kong government is reportedly considering launching a spot cryptocurrency exchange-traded fund (ETF). This comes in the midst of the regulatory pushback against such products in the United States.

Arthur Hayes, co-founder of BitMEX, believes that the potential entrance of Hong Kong into the spot crypto ETFs could be a major development in the context of the ongoing economic confrontation between the U.S. and China.

He took to X (formerly Twitter) on Nov. 6 to express his excitement over the competition between the two economies, emphasizing that this competition will ultimately be beneficial for Bitcoin (BTC). “Competition is amazing. If the U.S. has its proxy asset manager, BlackRock, launching an ETF, China needs its proxy asset manager to launch one, too,” he wrote.

Crypto ETF Launch in Hong Kong

Coin Bureau, a cryptocurrency brand, was quick to respond to the potential of a spot crypto ETF launch in Hong Kong. According to Coin Bureau, the U.S. Securities and Exchange Commission (SEC) may be feeling pressure as other jurisdictions, like Hong Kong, are embracing the idea of a spot Bitcoin ETF.

“It’s a clear message to the SEC that if they continue to obstruct innovation in the United States, other countries will fill the void,” Coin Bureau wrote on X.

Crypto influencer Lark Davis noted that the news of a spot crypto ETF in Hong Kong shows that the Chinese government is not wanting to miss out on any crypto opportunities. “Hong Kong is getting spot Bitcoin ETFs now! Chinese money does not want to miss out,” Davis said.

Cryptocurrency ETFs in Hong Kong

Hong Kong is looking into allowing retail investors to access spot ETFs related to cryptocurrencies such as Bitcoin, provided that regulatory issues are addressed, according to Securities and Futures Commission CEO Julia Leung, as reported by Bloomberg on Nov. 5. The SFC did not respond to Cointelegraph’s request for comment.

Hong Kong’s possible entrance into Bitcoin spot ETFs comes as a number of investment firms in the U.S. are attempting to launch similar products, despite the SEC’s long-standing opposition.

Even though both Hong Kong and the U.S. have approved crypto ETFs connected to futures contracts, neither jurisdiction has yet to authorize a spot crypto ETF. Unlike a Bitcoin futures ETF, which tracks futures contracts to replicate BTC prices, a spot Bitcoin ETF holds BTC directly, enabling investors to gain exposure to the asset.

The U.S. was the first to launch futures-linked crypto ETFs in 2021, with Hong Kong following in its footsteps in late 2022 by introducing CSOP cryptocurrency futures products. Together with the Samsung Bitcoin Futures Active ETF, Hong Kong has around $65 million in crypto ETF assets, according to Bloomberg. The futures crypto ETFs have seen limited demand in Hong Kong, with their share still being minuscule compared to other global crypto funds.

In June 2023, Hong Kong and Shanghai Banking Corporation — the largest bank in Hong Kong — enabled its customers to purchase and sell Bitcoin and Ether (ETH)-based ETFs.

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