A new sign of Hong Kong’s commitment and interest in cryptocurrencies, the regulator of financial markets in the Chinese special administrative region, the Securities and Futures Commission, has just announced that ETFs (Exchange traded funds or listed index funds ) will be put on sale and traded, from Tuesday April 30, for the two most valuable cryptocurrencies, bitcoin and ether.
Hong Kong is thus following the movement launched in January by the United States, which was the first to authorize ETFs for bitcoin. Little known in Europe, but extremely popular across the Atlantic, these products, also called “trackers” in financial jargon, are simply funds backed by an asset whose value the ETF very faithfully reflects.
The investor is, in a way, buying a duplicate of a financial product. Buying an ETF allows you to invest in classic financial products (stocks, bonds, currencies, commodities, etc.), which are otherwise expensive or complicated to purchase directly.
The American decision had the immediate effect of attracting investors who had until then been careful not to approach cryptocurrencies. Due to the numerous scandals associated with these virtual currencies, and their use by criminal networks who value their anonymity and non-traceability, cryptofinance is still generally perceived as sulfurous.
“A first positive point”
“It was undeniably the United States that got the ball rolling. But Hong Kong gives the impression of having wanted to catch up by also authorizing ether ETFs, which New York has not yet done., observes Belgian financier Pierre-Edouard de Vliegher, who follows cryptofinance very closely.
Another difference: investors in Hong Kong will be able to bet on these ETFs by paying in bitcoin or ether. This will allow them to reinject their cryptocurrencies into the traditional system, explains Justin d’Anethan, head of Asia-Pacific partnerships at Keyrock, a European crypto specialist.
This decision confirms the ambition of the Hong Kong government to lead the way, at least in Asia, in the cryptocurrency sector and, more broadly, fintech. Since August 2023, the two main crypto exchanges registered in Hong Kong, HashKey Group and OSL, have been authorized to expand their clientele, until then exclusively professional, to individuals. From Saturday April 6 to Tuesday April 9, Hong Kong hosted a Web3 Festival (which refers to the world of blockchain, in which cryptocurrencies are designed) attended by hundreds of actors from all over the world, notably from Russia and Korea.
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