In simple terms, Hong Kong’s approval of Bitcoin and Ether exchange-traded funds (ETFs) for a launch on April 30 will set these funds apart from their equivalents in the United States.
Based on information from ChinaAMC’s report, their Bitcoin and Ether ETFs are designed to mirror the Chicago Mercantile Exchange’s (CME) crypto indexes in terms of performance. Redemptions can be made using either fiat money or cryptocurrency funds. Furthermore, these ETFs will be denominated in three different currencies: US Dollar, Hong Kong Dollar, and Chinese Yuan. BOCI-Prudential and OSL are responsible for the custodianship of these ETFs.
Two firms mentioned before, BOCI and OSL, will additionally handle storage of Bitcoin and Ether ETF assets on behalf of issuer Harvest Global. According to Harvest Global representatives, this partnership addresses issues like high margin demands, disparities in prices due to absent short positions, and losses from rollovers. Consequently, it presents a more authentic representation of Bitcoin and Ethereum’s real-time worth.
Concurrently, HashKey Capital, based in Hong Kong, will collaborate with Bosera Asset Management to debut Bitcoin and Ether spot ETFs. In regards to the upcoming crypto ETFs, their team commented:
“The approval of the virtual asset spot ETF and the innovative introduction of a currency-holding subscription mechanism (which allows investors to directly use Bitcoin and Ethereum to subscribe for corresponding ETF shares) are expected to further promote the development of the virtual asset market in Hong Kong and even Asia., attracting more global capital inflows.”
On April 24th, Eric Balchunas, senior ETF analyst at Bloomberg, revealed that the management fees for Hong Kong Bitcoin ETFs would be between 0.3% and 0.99%. In contrast, some US spot Bitcoin ETF issuers charge less than 0.25% annually. According to James Seyffart, a Bloomberg analyst, there might be a fee competition among the Hong Kong Bitcoin & Ethereum ETFs due to this price difference.
Three ETF issuers will process the creation and redemption of their ETF shares on two regulated cryptocurrency exchanges in Hong Kong – OSL and HashKey. Investors can choose to cash out or receive crypto for their shares before 11 am local time each day for redemptions, or until 4 pm local time for crypto withdrawals. BOCI Prudential will act as the custodian for all issuers, while market makers like Vivienne Court and Virtu Financial will facilitate trading.
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2024-04-24 20:10