The crypto world hasn’t seen this fast and enthusiastic adoption since US Bitcoin ETFs

Despite a tumultuous year so far with shaky global economic recovery and rising geopolitical tensions, global investors are looking at crypto investments more than ever. In the time since the approval of the Bitcoin spot ETFs by the SEC in the US, several governments have been looking to set up favorable investing schemes to meet the retail demand for crypto.

The recent approval by Hong Kong’s SFC should help give investors another confidence check on this booming asset class. It was reported that the six Hong Kong funds saw an inflow of HK$50 million in the first two-and-a-half hours of trading. Compared to the US BTC ETFs, which are all cash redemption, Hong Kong regulators’ passing on the in-kind redemption signals a pathway familiar to major equity funds. This is exciting news for brokers and trading firms in Hong Kong.

The key difference between Hong Kong Bitcoin ETFs compared to their US counterpart lies in the structure of the ETF. The US allows only cash buy-in to get shares of the ETF, whereas Hong Kong allows Bitcoin in to get ETF shares. The potential access to the Chinese mainland users sparks high interest in Web2 investors.

Regardless of the type of spot ETFs being offered, retail investors can invest in crypto with more peace of mind knowing their investment is sound and compliant. After the fallout of FTX, investors grappled with doubts and uncertainties around crypto. For one, cryptos are already volatile compared to traditional assets, so losing money due to fraud only aggravates the pain investors feel. The advent of the Bitcoin spot ETF paves the way for a compliant and secure investment experience.

For traditional investors, Bitcoin spot ETFs offer an ideal way to gain exposure to crypto while focusing on portfolio diversification. Many Bitcoin spot ETFs offer little or no fees at the launch date, and retail investors should compare fees across different ETF products once they become available.

As of writing, reports are saying that Hong Kong ETFs managed by Bosera-HashKey Capital and China Asset Management (ChinaAMC) has launched at the end of April for both retail and institutional investors. According to the company press release, Hong Kong-based investment firm Victory Securities is the “first and only securities firm in history that offers in-kind subscription for both Ethereum and Bitcoin spot ETF, among the few participating dealers in this batch of ETFs issuance.”

The potential of the Hong Kong ETFs is boundless as the US ETFs have seen a total of $11 billion inflow since the launch. Besides, the Hong Kong ETFs will be important for Asia’s financial center’s ambition to become a Web3 hub open to all.

Yiwei Wang is an avid blockchain enthusiast with a focus on the intersection of crypto, economics, and public policy. He was previously the Global PR Lead at Babel Finance and he began his career at Ogilvy in Beijing. He is currently the Head of Global PR at Metalpha.

TNGlobal INSIDER publishes contributions relevant to entrepreneurship and innovation. You may submit your own original or published contributions subject to editorial discretion.

Bitcoin ETF: A fresh start in crypto investing