Hong Kong Crypto ETFs Will Have Management Fees From 0.3% To 0.99%

Key Points:

• Debuting on April 30th, Hong Kong crypto ETFs offer competitive fees, hinting at a potential fee war.
• Approval for ETFs by ChinaAMC, Harvest, and Bosera HashKey marks regulatory progress, enhancing Hong Kong’s role in the global crypto market.

Hong Kong is preparing to launch spot cryptocurrency exchange-traded funds (ETFs) by the end of April, following the lead of the United States in embracing this investment trend.

Competitive Fees Signal Potential Fee War in Hong Kong Crypto ETFs

Scheduled for debut on April 30, the Hong Kong spot Bitcoin ETFs and Ethereum ETFs will feature fees ranging from 30 to 99 basis points, indicating competitive pricing compared to initial expectations. Analysts anticipate the possibility of a fee war erupting in Hong Kong, with Harvest poised to introduce a fee waiver, potentially driving fees down to as low as 0.3%.

Leading asset managers in China are finalizing preparations for the launch of spot Bitcoin and Ether ETFs, aiming to tap into the growing demand for cryptocurrency investment opportunities. The upcoming Hong Kong crypto ETFs are expected to draw comparisons with their US counterparts, which amassed $56 billion in assets within three months of their launch.

Regulatory Approval Paves the Way for Hong Kong’s Emergence as Crypto Hub

Hong Kong has been competing with other global financial hubs like Singapore and Dubai to establish itself as a well-regulated center for virtual assets, signaling a broader strategy to rejuvenate its financial reputation following recent political challenges.

The approval of ChinaAMC, Harvest, and Bosera HashKey Bitcoin and Ether ETFs by the Securities and Futures Commission (SFC) underscores the regulatory progress in the region. Unlike the US cash-creation model, Hong Kong crypto ETFs offer in-kind creation models, facilitating the creation of new shares using Bitcoin and Ethereum.

The success of Hong Kong crypto ETFs in attracting investments, particularly from Chinese wealth and Asia-Pacific market players, will provide valuable insights into Hong Kong’s evolving role in the global cryptocurrency landscape.

Bloomberg Intelligence ETF Analyst Rebecca Sin estimates these funds could accumulate $1 billion in assets under management over the next two years, further solidifying Hong Kong’s position as a key player in the digital asset market.