Apart from Harvest Fund Management, other companies in Hong Kong are actively exploring the possibility of launching spot Bitcoin ETFs.
Harvest Fund Management Co Ltd, a Chinese asset management firm, has made history as its Hong Kong arm became the first institution to file a spot Bitcoin Exchange-Traded Fund (ETF) application in the city.
This development comes in the wake of the recent approval of the first batch of US Bitcoin spot ETFs by the US Securities and Exchange Commission (SEC) on January 11th. The approval in the US has seemingly spurred the Hong Kong Securities and Futures Commission (SFC) to expedite its approval process for spot crypto ETFs.
Harvest Fund’s Bitcoin ETF Application
Tencent News reported today that Harvest Fund Management is aiming to launch the city’s first spot ETF post the Lunar New Year holiday, which is scheduled for February 10 this year. Notably, Hong Kong’s spot ETFs may have a unique feature compared to those in the US, as there is a possibility of allowing direct Bitcoin subscriptions in addition to subscriptions in legal currency.
The news of Harvest Fund Management’s application has generated considerable interest among investment managers, particularly those linked to family offices. Despite initial hesitations due to the complexities of direct investment in Bitcoin, the prospect of spot ETFs in Hong Kong has sparked enthusiasm for this investment route.
Established in March 1999, Harvest Fund Management is among the first ten fund management firms set up in mainland China, headquartered in Beijing. With over 300 people in its investment research team, the company managed assets exceeding RMB 1.3 trillion as of June 2021. Despite its presence, Harvest Fund Management, along with the SFC has yet to officially comment on this development.
Hong Kong has been making strides in embracing the crypto market. In December, the city announced its readiness to accept applications from traditional financial companies interested in creating ETFs tracking spot-based cryptocurrencies. While the country already permits futures-based crypto ETFs, the approval for spot ETFs is expected to open new avenues for retail investors as well.
Other Players Exploring Bitcoin ETFs in Hong Kong
Apart from Harvest Fund Management, other companies in Hong Kong are actively exploring the possibility of launching spot Bitcoin ETFs.
Venture Smart Financial Holdings Ltd had earlier announced that it anticipates launching its spot Bitcoin ETF within the first quarter, according to Bloomberg. Additionally, OSL, a Hong Kong-licensed crypto exchange has also stated in an earlier report by Coinspeaker that it is in discussions with other fund companies, exploring the possibility of launching a spot Bitcoin ETF in Hong Kong by mid-2024.
In addition to efforts to issue spot crypto ETFs, Hong Kong is increasing its efforts to develop stablecoin rules. Companies such as Harvest Global Investments, RD Technologies, and VSFG are reportedly engaged in discussions with the Hong Kong Monetary Authority about potential stablecoin trials. VSFG, in particular, expects the stablecoin sandbox process to commence in the first quarter of 2024.
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