Venture Smart Financial Holdings (VSFG) is a Hong Kong-based firm that is planning to launch ETF with direct exposure in Bitcoin during the first quarter of 2024. Bloomberg recently talked with the VSFG Group’s head of investment Brain Chan noted that the investment platform can reach $500 million in AUM before the end of 2024.
The firm is working in tandem with the Securities and Futures Commission (FSC) of Hong Kong to list the first spot Bitcoin ETF in the region. In addition to VSFG, around 10 asset management firms from the region are reportedly working on filing for a Bitcoin spot ETF application as per local media reports.
On this account, the country is moving closer to introducing a Bitcoin spot ETF in the next few months. Chan told Bloomberg that the Bitcoin investment fund market has a huge potential.
In December, 2023 SFC officials issued a notification declaring that the regulatory agency was receiving Bitcoin ETF applications from licensed and authorized institutions based out of Hong Kong. Local reports have also noted that around 10 asset management firms from the region have been working on introducing a Bitcoin spot ETF application.
Hong Kong to Accept Bitcoin ETF Applications in 2024
RJ Ke, a blockchain analyst working on the Ethereum scaling solution Taiko, noted that Hong Kong is likely to accelerate Bitcoin ETF applications during the upcoming months. He further stated that the regulators hailing from the region are likely to take a page out of the successful launch of the Bitcoin spot ETF application in the United States on 11th January 2024.
It is important to note that various firms in Hong Kong are already offering Bitcoin futures-backed ETF products in the region.
One such firm is Samsung Asset Management firm which launched Samsung Bitcoin Futures ETF in 2023. The firm noted that it has not discarded the probability of working on such a spot Bitcoin ETF listing. On the other hand, investors have continued to flock around and gain exposure in Bitcoin spot ETFs based out of the United States.
It is important to note that the SEC approved 11 Bitcoin spot ETF applications at the start of the New Year. Bitcoin spot ETF has granted Bitcoin investment opportunity to a class of traditional investors who may acquire Bitcoin spot ETF shares leading to considerable capital inflows.
Investors Eye US-based BTC ETFs Following Price War in Europe
Before 2024, ETF investors were looking at European and Canadian-based ETPs for crypto-backed funds. However, the introduction of new Bitcoin spot ETFs has changes the dynamics.
It seems that investors are converting to US-based Bitcoin ETFs listings on account of capitalizing on trading fees. On this account, two asset management firms namely WisdomTree and Invesco recently decided to lower fees on European-based ETP products by more than 60%.
Based on these changes, the $137 million Invesco ETP has lowered charges from 0.99% to 0.39%. In the same manner, WisdomTree reduced spot ETP from 0.95% to 0.35% for $325 million fund.
It is important to mention that European ETPs are fashioned as ETNs or exchange-traded notes that allow investors to own debt security rather than underlying assets in ETF. Invesco’s European ETF head told Financial Times that US ETFs have set up ETF fees based on supply and demand balance.