Hong Kong Firm Eyes Spot Bitcoin ETF Launch in Q1 2024

A finance firm in Hong Kong, Venture Smart Financial Holdings Limited (VSFG) has set its eyes on launching a spot Bitcoin exchange-traded fund (ETF) in Q1 of 2024. 

A report by Bloomberg shows the firm is targeting $500 million in assets under management by the year-end. The company which touts itself as Hong Kong’s first approved virtual asset manager, however has yet to place an ETF application with the Securities and Futures Commission (SFC), the city’s financial regulator.  

The SFC had last year announced that the authorities were ready to accept spot crypto ETF applications. It also released two circulars at the time that spelled out the requirements for launching such products. 

Prior to this, Hong Kong had released  its crypto licensing regime for crypto trading platforms in June 2023 in hopes of reclaiming its position as Asia’s crypto hub. Whale there are three crypto futures ETFs already listed in Hong Kong, there’s no spot ETF so far.

Apart from VSFG, chief operating officer of Hong Kong crypto exchange HashKey, Livio Weng said earlier this month that around ten fund companies in the region were already considering the option to launch spot crypto ETFs. 

The Race for Spot ETFs in Asia

The U.S approved 11 spot Bitcoin ETFs last week which marked a huge milestone in the industry. Shortly after that, co-founder of Hong Kong-based crypto venture capital firm Animoca Brands, Animoca, Yat Siu said that the approval may have more impact in Asia.

In an interview with The Block, Siu said the U.S approval was a big deal and the rest of the world will rush to emulate it, but Asia is likely to act faster considering the way that crypto regulation has been making progress in the region.

“There’s regulatory clarity and there’s this willingness from, basically governments and regulators to sort of build this ecosystem and partake and see the opportunities that [are] out there,” Siu said.

Siu went on to say that investors in Asia, particularly the younger generation, are more open to capitalism and innovation than their U.S counterparts, adding that “the American dream is more alive and well in Asia than it is in America,”

Similarly, Angela Ang, a former Monetary Authority of Singapore regulator and senior policy advisor at blockchain intelligence firm TRM Labs, told The Block that Hong Kong may be the next to launch a spot Bitcoin ETF.

“In Asia, Hong Kong is definitely the prime candidate for the next spot crypto ETF. Aligning with its crypto hub ambitions, Hong Kong regulators have already sent a clear message that there is an appetite to consider spot crypto ETFs, including for retail,” she said. With VSFG’s ambition, It seems Ang was right.

South Korea on the Move

Although Hong Kong may well be on its way to becoming the next destination for a spot crypto ETF, South Korea may be right behind it, as the government seems to be open to the idea even though the local regulator is skeptical.

The chief of staff for policy of the presidential office Sung Tae-yoon said in a Thursday briefing that the South Korean government is exploring ways to incorporate foreign affairs into local regulations — which may indicate the country’s openness to launching spot crypto ETFs, according to local news outlet Maeil Business.

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