Hong Kong-based Victory Securities recently unveiled its fee proposals for Bitcoin and Ethereum exchange-traded funds (ETFs) following the approval of these cryptocurrency products by regional authorities. This move by Victory Securities comes at a time when the Hong Kong Securities and Futures Commission (SFC) has yet to release a complete list of approved ETF issuers.
According to a report translated and shared by blockchain reporter Colin Wu on April 20, the fees for purchasing Bitcoin and Ethereum ETFs in the primary market would range between 0.5% and 1% of the total transaction, with a baseline fee of $850. These fees also apply to secondary market activities, with online transactions incurring a fee of 0.15% and telephone transactions incurring a fee of 0.25%, catering to different investor preferences.
Victory Securities’ fee structure closely aligns with those implemented by U.S. asset managers for similar products. For instance, Franklin Templeton offers a notably lower fee of 0.19% for its spot Bitcoin ETF, while other ETFs fluctuate between 0.20% and 0.90%. In contrast, the Grayscale Bitcoin Trust (GBTC) charges a higher fee of 1.5%.
The regulatory landscape in Hong Kong is evolving, as demonstrated by the approval of spot ETFs for Bitcoin and Ether on April 15. Following the lead of the United States, where spot Bitcoin ETFs have attracted significant capital, Hong Kong’s actions are setting a new precedent for cryptocurrency investments in Asia.
Three offshore Chinese asset managers, including the Hong Kong units of Harvest Fund Management, Bosera Asset Management, and China Asset Management (ChinaAMC), are preparing to launch their Bitcoin and Ether ETFs. These developments follow the recent approval of three ETF providers by the SFC, indicating positive momentum within the sector.
ChinaAMC has been actively getting ready for the launch of its ETFs, with OSL Digital Securities acting as the custodian. Similarly, Harvest Global and Bosera International have received the necessary regulatory approval but have yet to begin offering their ETFs.
Despite the excitement in Hong Kong, the broader Chinese market remains restrictive towards cryptocurrency trading due to a severe crackdown in 2021. Nonetheless, Hong Kong is progressively positioning itself as a regulated cryptocurrency hub, aiming to compete internationally with major financial centers like Dubai and Singapore. The territory’s strategy includes the potential opening of doors to mainland Chinese investors for cryptocurrency investments through these newly approved ETFs.
The global financial community is closely observing Hong Kong’s innovative steps in approving the first Ether ETF, despite the U.S. Securities and Exchange Commission’s hesitance to approve a similar product. Asset managers and investors are aligning their strategies with these developments, hoping to capitalize on the new opportunities presented by Hong Kong’s evolving regulatory framework.
As the crypto market continues to mature, the introduction of ETFs in Hong Kong is expected to attract more traditional investors, providing them with a safer and regulated way to gain exposure to cryptocurrencies. With billions of dollars flowing into spot Bitcoin ETFs in the U.S., Hong Kong’s market could experience a similar influx, permanently reshaping investment in the region.
