Hong Kong may give the green light for spot crypto exchange-traded funds in the near future after US regulators for the first time approved ETFs that invest directly in bitcoin, but with words of caution.
The US Securities and Exchange Commission authorized 11 such funds from industry heavyweights BlackRock, Invesco and Fidelity to smaller competitors including Valkyrie to begin trading yesterday.
The ETF managers kicked off a fee war even before the approval.
BlackRock's iShares Bitcoin Trust would charge 0.25 percent, compared with the 0.30 percent fee set earlier while it also lowered its introductory offer on the fund, so that investors will pay a 0.12 percent fee in the first 12 months or for the first US$5 billion (HK$39 billion) in assets.
ARK 21Shares Bitcoin ETF lowered its fee to 0.21 percent from 0.25 percent while it is providing a sweetener of zero fees for its introductory offer.
Bitwise remains the cheapest option that could be offered to investors, listed at 0.20 percent after an introductory period.
Financial media outlet Caxin had earlier reported that 10 funds are preparing to launch spot crypto ETFs in Hong Kong, citing Livio Weng, the chief operating officer of HashKey, one of the two licensed crypto exchanges in the city.
Seven or eight of them are already in advanced stages, Weng said.
Last month, Hong Kong's regulators said they were ready to consider applications for spot crypto ETFs.
Although US SEC chair Gary Gensler voted for the proposal to list the products along with the agency's two Republicans, he reiterated in a statement that the agency does not endorse digital assets.
The regulator's two other Democrats voted against the plan.
"While we approved the listing and trading of certain spot Bitcoin ETP shares today, we did not approve or endorse bitcoin," Gensler wrote. "Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto.
Ark Investment Management's Cathie Wood, who had one spot Bitcoin ETF approved, said she was taken aback by Gensler's statement, adding that Gensler "denigrated" the whole crypto space.
The SEC reiterated it does not endorse digital assets. Reuters
