Hong Kong’s Harvest Fund Management Seeks Spot Bitcoin ETF Approval

Harvest Fund Management plans to launch its first spot bitcoin ETF in Hong Kong after the Lunar New Year.

The main focus remains on spot bitcoin ETFs, and Hong Kong players don’t want to be left behind.

Harvest Fund Management Hong Kong is the latest entity to apply to the local regulator for a spot bitcoin exchange-traded fund (ETF). The move is in line with preparations for the first wave of spot crypto ETFs in Hong Kong.Bitcoin Miner

First Spot Bitcoin ETF in Hong Kong

According to Tencent, Harvest plans to launch Hong Kong’s first spot bitcoin ETF after the Lunar New Year holiday on Feb. 10. Following the approval of a number of funds in the U.S., Hong Kong regulators have indicated that they are prepared to consider similar applications.

These ETFs are expected to provide a regulated avenue for digital asset investments, bringing a number of benefits such as fostering an orderly asset class market while enhancing investor protection and linking digital asset platforms to traditional financial institutions.

However, there are challenges in terms of fee structure and regulatory compliance. Given the limited number of licensed cryptocurrency exchanges in Hong Kong, there is pressure to maintain reasonable fees.

Regulators have set detailed and stringent standards for applicants, including strict custody requirements. They stipulate that ETF trading must be conducted through a cryptocurrency platform licensed by the SFC or an authorized financial institution that complies with the HKMA’s regulatory standards.

Hong Kong Asset Managers Enter Spot Cryptocurrency ETFs

With Hong Kong’s growing importance as a cryptocurrency hub, the city-state’s financial services firm, Venture Smart Financial Holdings Ltd. has announced plans to file an application with the SFC to launch an ETF. Brian Chan, head of the firm’s investment and product division, said

“This is a market with huge potential. Our goal is to reach $500 million in assets under management by the end of this year.”

Earlier this year, Livio Weng, chief operating officer of HashKey, a licensed cryptocurrency exchange in Hong Kong, revealed in an interview with Caixin that about 10 fund companies in Hong Kong are exploring the possibility of launching a spot crypto ETF.

Weng noted that these fund managers, including those backed by Chinese capital as well as Asian and European capital, are considering introducing spot crypto ETFs in Hong Kong.ETC Miner

About seven or eight of these firms have already started discussions with the Hong Kong SFC and have assembled teams to design these investment products.

HashKey, which has been licensed by the SFC to provide retail cryptocurrency trading services, has also confirmed plans to consider participating in such funds in Hong Kong.