The Hong Kong Stock Exchange recently introduced Asia's first exchange-traded funds (ETFs) for both Bitcoin and Ethereum, marking a significant moment for the cryptocurrency world.

Listing of ETFs

Six different ETFs have been listed by the Hong Kong Exchanges and Clearing Ltd., including Bosera HashKey Bitcoin ETF, Bosera HashKey Ether ETF, ChinaAMC Bitcoin ETF, ChinaAMC Ether ETF, Harvest Bitcoin Spot ETF, and Harvest Ether Spot ETF. These listings were made possible following the approval of spot Bitcoin and Ether ETFs managed by several financial firms.

Brian Roberts, who serves as the Head of Equities Product Development at the Hong Kong Exchanges and Clearing Ltd., emphasized the positive impact these listings will have on enhancing the diversity and liquidity of the Hong Kong ETP market.

Investor Access and Features

Qualified investors located outside of Hong Kong are eligible to access these spot crypto ETFs. However, investors from mainland China are subject to specific restrictions. One unique feature of these Hong Kong spot crypto products is the option for in-kind transactions. This means that investors can purchase the ETFs using Bitcoin or Ethereum and later exchange them for cash, or vice versa, thereby providing two-way investment flexibility.

In the past, Hong Kong had listed three futures-based crypto ETFs. The interest in ETFs related to virtual assets has steadily increased since these initial launches back in late 2022. The three crypto futures ETFs saw significant growth in average daily turnover, reaching HK$51.3 million (approximately $6.5 million) in the first quarter of this year, up from HK$8.9 million in the previous year. Additionally, these ETFs witnessed net inflows of HK$529 million during the first quarter.