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China's Southern Fund Eyes Bitcoin ETF Launch in Hong Kong

China's Southern Fund Eyes Bitcoin ETF Launch in Hong Kong

Apr 9, 2024

China's Southern Fund Eyes Bitcoin ETF Launch in Hong Kong

Hong Kong is at the cusp of introducing its first spot Bitcoin Exchange-Traded Funds (ETFs), a move that signals a significant shift in the Chinese perspective on Bitcoin. Major Chinese asset managers are spearheading this initiative, utilizing their Hong Kong subsidiaries to file applications for the ETFs, with the industry expecting approvals as early as this quarter.

Harvest Fund and Southern Fund, both heavyweights with considerable assets under management, have signaled their intention to capture the growing interest in Bitcoin by applying for spot Bitcoin ETFs. A representative from Harvest Fund Management stated, “We are now positioning in the Bitcoin business too.”

Southern Fund’s subsidiary, Southern Dongying, is particularly notable for its pioneering efforts in the Bitcoin ETF market, positioning Hong Kong as a significant center for Bitcoin investment.

The regulatory environment in Hong Kong for Bitcoin ETFs has been progressing swiftly, with insights from industry insiders suggesting that the approvals for these innovative investment vehicles could be granted in the second quarter of the year. The Securities Times reported that the introduction of Bitcoin ETFs could dramatically bolster Bitcoin’s legitimacy in the eyes of Chinese regulators and investors.

Despite China’s stern stance against Bitcoin trading and mining, Hong Kong has maintained a more liberal stance. This strategic positioning is attracting major Chinese funds to use their Hong Kong subsidiaries to engage with Bitcoin within a regulatory compliant framework, thereby benefiting from the region’s welcoming regulatory climate.

While China bans Bitcoin mining and enforces strict capital flow regulations, the Bitcoin market continues to thrive in a legal gray zone, with trading on platforms such as Binance and OKX, according to Reuters.

The imminent introduction of Bitcoin ETFs in Hong Kong is expected to provide a regulated investment pathway into Bitcoin. Following the positive reception of similar ETFs approved by the SEC on January 11, analysts remain optimistic about the prospects of Hong Kong’s Bitcoin ETFs.

Hong Kong is poised to solidify its position as a leader in the international Bitcoin market with the expected launch of its first Bitcoin ETFs. This development is a testament to the growing institutional interest in Bitcoin within traditional financial systems.

Bitcoin News Article

Yicai Global Article

Securities Times Article


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