Hong Kong’s Financial Landscape Sees Milestone as Harvest Fund Files for Bitcoin ETF
In an exclusive report by Tencent News, a groundbreaking shift in Hong Kong’s approach to digital asset trading and investment is highlighted, as Tencent News becomes the first media outlet of its kind in Hong Kong to cover the crypto sector extensively.
Harvest Fund Hong Kong, a prominent player among Chinese fund companies, has taken a significant step by filing an application for a Bitcoin Exchange-Traded Fund (ETF) with the Securities and Futures Commission (SFC) in Hong Kong. This move marks a pivotal moment in Hong Kong’s financial scene, following the historic approval by the U.S. Securities and Exchange Commission (SEC) on January 11, 2024, for the first batch of U.S.-based Bitcoin Exchange-Traded Funds, including the transformation of Grayscale Bitcoin Trust from a closed-end fund to a Bitcoin immediate investment fund, along with approvals for giants like BlackRock and Fidelity.
In the wake of these developments, the Securities and Futures Commission in Hong Kong is reportedly considering expediting the approval process for the region’s first immediate Bitcoin investment fund. Plans are underway to list it on the Hong Kong Stock Exchange shortly after the Chinese New Year, in early February. Tencent News reports that the SFC may adopt a strategy similar to the SEC by approving multiple immediate Bitcoin ETF applications simultaneously, even though Harvest Fund’s application remains the sole one so far.
Industry insiders speculate that, even with the approval of multiple immediate ETFs, the dominance of major institutions in the U.S. market, such as BlackRock and Fidelity, may be reflected in Hong Kong. This expectation stems from the extensive investor bases and wide customer acquisition networks these institutions possess. For instance, BlackRock’s IBIT fund currently ranks third in size among over 600 exchange-traded funds issued in the United States last year, underscoring the increasing investor interest in immediate ETFs compared to other types of ETFs.
There are also rumors of a potential operational difference between immediate ETFs in the United States and Hong Kong. According to Tencent News sources, in addition to facilitating cash creation, Hong Kong’s immediate ETFs might also offer the ability to redeem Bitcoin—an feature currently unavailable in U.S. immediate ETFs. However, the SFC has not officially commented on this aspect.
As previously reported by Bitcoinist, nearly ten Chinese asset management companies are preparing to launch Bitcoin and cryptocurrency exchange-traded funds in Hong Kong. This signals a growing acceptance in the region and the integration of digital assets into its financial ecosystem. Levi Wong, Chief Operating Officer at HashKey Group, revealed that seven to eight of these companies are in “advanced stages” of launching these products.
This initiative aligns with the evolving regulatory stance of the Securities and Futures Commission and the Hong Kong Monetary Authority, expressing openness to requests for ETFs for virtual assets. This departure from the previous “professional investors only” policy, established in 2018, reflects a broader shift towards embracing and regulating digital assets, positioning Hong Kong as a potential hub for Bitcoin and cryptocurrency investment and innovation.
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