Hong Kong in turn launches ETF funds on cryptocurrencies, a first in Asia

The first cryptocurrency-backed ETFs include six funds issued by three managers: Bosera Funds, China Asset Management (Hong Kong) Limited and Harvest Global Investments.

Hong Kong on Tuesday launched trading on a new cryptocurrency investment product, exchange traded funds (ETFs), continuing its goal of becoming a regional center for investments in digital assets.

The American financial markets watchdog, the SEC, authorized in January these index funds which allow investors to benefit from developments in bitcoin without directly placing their money in this very volatile digital currency. The move is seen as a major step for the adoption of cryptocurrencies by a wider audience.

Six fonds ether et bitcoin

The first ETFs on the Hong Kong Stock Exchange include six funds issued by three managers: Bosera Funds, China Asset Management (Hong Kong) Limited and Harvest Global Investments. Each company issued a bitcoin spot ETF and an ether ETF. Transactions on these funds can be done in Hong Kong dollars or US dollars, while ChinaAMC also allows transactions in yuan.

During the first 30 minutes of trading on Tuesday, the new ETFs rose between 0.62% and 3.81%. The new funds “are not expected to attract the same level of demand as those in the United States,” CCData, a digital asset analysis company, said on Friday. However, “industry experts believe they could encourage other countries to approve cryptocurrency ETFs and could help promote broader adoption of digital assets,” the firm noted.

“Advantage compared to the United States”

Hong Kong also allows investors to invest in ETFs by paying in bitcoin or ether, which is a “clear advantage over the United States,” according to Han Tongli, head of Harvest Global, one of the managers of ETF in Hong Kong.

“I think we are not competing with our peers in Hong Kong, but with large fund management companies in the United States,” Han said, as quoted by Hong Kong media Techub News.

“We defend and develop Hong Kong’s status as an international financial center,” he added. Hong Kong could also serve as a laboratory for China to test trading in virtual assets, which remains banned on the continent. In the United States, demand for bitcoin ETFs has slowed after a hot start in early February, according to data from Farside Investors.