Hong Kong could be the next major financial jurisdiction to launch a Spot Bitcoin ETF according to Reuters, as the city looks for new ways to boost investment.
The business news outlet cited sources from the Hong Kong financial system stating that an Spot ETF approval will likely occur within the next two weeks. It was added that ‘at least four’ asset managers from mainland China and Hong Kong have submitted applications.
If Reuters’ sources prove accurate, this move would make Hong Kong the first Asian jurisdiction to approve such a measure. It could also significantly boost investment in the city’s financial network and exchanges due to Bitcoin’s soaring valuation.
The world’s leading cryptocurrency is currently valued over $70,000, its highest ever valuation on record, having climbed from $60,000 in February – this was its highest rating since 2021.
This was heavily influenced by the US Securities and Exchange Commission (SEC) approval of a Spot Bitcoin ETF in February 2024. This made investment in the digital currency more accessible to a wider pool of prospective investors.
Hong Kong’s financial authorities will be hoping for a similar impact in their jurisdiction. The city, a special administrative region of the People’s Republic of China, is a traditional financial hub but like many others it has suffered the impacts of COVID-19 and subsequent years of global political and economic uncertainty, as well as increasing tensions with the central Chinese authorities.
It is important to note that China has been quite receptive to the notion of digital currencies, although more so in the form of Central Bank Digital Currencies (CBDCs) – a digital Yuan in China’s case – than private investment in cryptocurrencies.
Regardless, Hong Kong approval of a crypto ETF would likely be very welcome among Chinese and Asian investors with interests in cryptocurrency.
These investors could expect the value of their digital assets to increase even further. Meanwhile, prospective investors would also gain a new avenue to purchase crypto shares via ETF pools.
The SEC’s ETF approval received a warm reception from several corners of the crypto, fintech and investment world, notably Blackrock and Greyscale, which were the two biggest voices calling for the move.
This is not to say that all opinions have been favourable, however. The European Central Bank (ECB), for example, has been very supportive of CBDCs (a Digital Euro) but also very critical of Bitcon’s position as either a payment method or investment vehicle, including via the ETF.
Additionally, the SEC was for a long-time opposed to an ETF approval, with Chairman Gary Gensler often speaking out against it. Although approving the Bitcoin ETF, the SEC has since resisted calls from Blackrock and Grayscale to do the same for Ethereum, the world’s second largest cryptocurrency.
