By
Bena Ilyas
May 3rd, 2024
VSFG is aiming for a second-quarter submission for a spot Ethereum ETF. However, it shall happen subject to the approval and listing of its spot Bitcoin ETF in the first quarter.
Crypto markets outside the US are catching the bug for the spot Ethereum exchange-traded-fund (ETF). Hong Kong-based financial services giant – Venture Smart Financial Holdings Ltd (VSFG) – is now looking to apply for a spot Ethereum ETF, with the potential anticipation of launching its Bitcoin ETF in Q1 2024.
In a recent interview with The Block on Friday, VSFG Chairman Lawrence Chu revealed that the firm is in the concluding stages of formally submitting its spot Bitcoin ETF application to the Hong Kong Securities and Futures Commission. Chu mentioned that in Hong Kong, comprehensive regulatory discussions usually precede the application submission. “Submission [for application] is almost like when you’re 95% there,” he added.
Furthermore, Chu highlighted that VSFG is aiming for a second-quarter submission for a spot Ethereum ETF. However, it shall happen subject to the approval and listing of its spot Bitcoin ETF in the first quarter. “But that really depends on the conversation we have with the regulator,” he said. “We will be ready.”
Chinese asset management firm Harvest Fund is also looking to bring its spot Bitcoin ETF into the Hong Kong market. With the city’s crypto-friendly steps in the last two years, more and more local firms are willing to offer crypto investment products.
In January, Livio Weng, Chief Operating Officer of Hong Kong-based HashKey cryptocurrency exchange, stated that approximately 10 fund companies are exploring the possibility of launching spot crypto ETFs in the city.
Can Hong Kong Bitcoin ETFs Trigger Fee War?
As multiple fund companies in Hong Kong gear up to apply for spot Bitcoin ETFs, a competitive environment may emerge, resembling the fee race observed in the US. Recently, top players like Invesco and Galaxy decided to lower their Bitcoin ETF fees, in order to attract more investors.
According to Chu, there is an anticipation of the introduction of several ETFs. He emphasized a nuanced role for his firm, stating:
“Our role is slightly nuanced because I think we’re also trying to help ETF issuers get into the game.”
Chu highlighted a distinction between US and Hong Kong ETF issuers, noting that US firms often have their own digital asset teams. In contrast, he pointed out that in Hong Kong, there exists both a licensing requirement and a knowledge gap, with most ETF issuers lacking a dedicated digital asset team.
“It becomes less of a competition for us, but rather it’s competition between ETF issuers on their marketing side,” Chu continued. “From that point of view, you can think of us as more of a service provider to all ETF issuers.”