The Hong Kong government is reportedly considering launching a spot cryptocurrency exchange-traded fund (ETF) amid continued resistance from U.S. regulators to such products, exciting the cryptocurrency community.
BitMEX co-founder Arthur Hayes believes that Hong Kong’s possible entry into spot crypto ETFs could be a significant development amid the economic confrontation between China and the United States.
Hayes took to X (formerly Twitter) on November 6 to express excitement about the competition between the two economies, stressing that such competition would ultimately benefit Bitcoin (BTC).
“The competition is staggering. If the United States has its agency asset management company BlackRock launch ETFs, then China needs its agency asset managers to launch ETFs,” he wrote.
The competition is amazing. If the United States has its agency asset management company BlackRock launch an ETF, then China also needs its agency asset management company to launch an ETF.
Sino-US economic war Bitcoin USD. pic.twitter.com/ok7xipN4M5
— Arthur Hayes (@CryptoHayes) November 6, 2023
Cryptocurrency brand Coin Bureau was also quick to react to the possible launch of a spot crypto ETF in Hong Kong. According to Coin Bureau, the U.S. Securities and Exchange Commission (SEC) may come under some pressure as other jurisdictions such as Hong Kong follow the trend of spot Bitcoin ETFs.
“It’s a rough story for the SEC that if they continue to stifle innovation in U.S. capital markets, other countries will fill the void,” Coin Bureau wrote on X.
Cryptocurrency influencer Lark Davis also emphasized that the latest spot crypto ETF news from Hong Kong shows that the Chinese government does not want to miss the opportunity for cryptocurrencies.
“Hong Kong will now launch a spot Bitcoin ETF! Chinese funds don’t want to miss out,” Davis point out.
Hong Kong is considering allowing retail investors to buy spot ETFs related to cryptocurrencies such as Bitcoin, provided regulatory issues are met, Securities and Futures Commission chief executive Leung Fung-yee said explainAccording to a report by Bloomberg on November 5, the Securities Regulatory Commission did not immediately respond to Cointelegraph’s request for comment.
Hong Kong’s potential move into spot Bitcoin ETFs comes as at least a dozen U.S. investment firms seek to launch similar products in the country, despite longstanding opposition from the U.S. Securities and Exchange Commission (SEC).
While both Hong Kong and the United States allow crypto ETFs linked to futures contracts, the jurisdictions have yet to approve spot crypto ETFs. Unlike futures Bitcoin ETFs, which track futures contracts to replicate the price of BTC, spot Bitcoin ETFs hold BTC directly, allowing investors to gain exposure to the asset.
related: Yat Siu: Spot Bitcoin ETF Hype Rekindles Enthusiasm for Blockchain Gaming
The United States was the first to launch a futures-linked cryptocurrency ETF in 2021, followed by Hong Kong The following At the end of 2022, CSOP followed in its footsteps and launched the CSOP cryptocurrency futures product. According to Bloomberg, including the Samsung Bitcoin Futures Active ETF, Hong Kong has approximately US$65 million in crypto ETF assets. Futures crypto ETFs have seen lower demand in Hong Kong and their share remains small compared to other global crypto funds.
The Hong Kong and Shanghai Banking Corporation, Hong Kong’s largest bank, reportedly allowed its customers to buy and sell ETFs based on Bitcoin and Ethereum (ETH) in June 2023.
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