In a significant development for the cryptocurrency market in Asia, ChinaAMC (Hong Kong) Limited held a press briefing on April 29 to announce the upcoming launch (at 1:30 a.m. UTC on April 30 or 9:30 a.m. Hog Kong time on April 30) of their Spot ChinaAMC Bitcoin ETF and Spot ChinaAMC Ethereum ETF. The event, titled “Asia Premiere – Spot ChinaAMC Bitcoin ETF and Spot ChinaAMC Ethereum ETF,” provided valuable insights into the company’s expectations and the unique features of its offerings.

According to a report by Foresight News, Zhu Haokang, head of digital asset management and family wealth at ChinaAMC (Hong Kong), expressed confidence that the trading volume of their virtual asset spot ETFs on the first day of listing would surpass the $125 million mark set by the 10 US Bitcoin spot ETF issuers on January 10 this year. He further stated that ChinaAMC aims to become the ETF issuer with the largest trading volume on the first day among the three issuers in Hong Kong.

Wayne Huang, head of OSL ETF and custody business, confirmed that OSL had completed its first day of raising funds with two funds, including ChinaAMC and another fund, and that the transactions were significantly greater than the capital inflow of the U.S. Bitcoin spot ETF on its first day of trading.

One of the key differences between ChinaAMC’s spot ETFs and their US counterparts is the ability to offer spot and physical subscriptions and redemptions, which is not available for US spot Bitcoin ETFs. Additionally, ChinaAMC’s Hong Kong spot ETFs are the only ones with Hong Kong dollar, US dollar, and RMB counters, and they offer both listed and unlisted shares, setting them apart from the other two issuers in Hong Kong.

The launch of these ETFs has attracted interest from a diverse range of investors, including Bitcoin mines, who can directly purchase virtual asset spot ETFs in Hong Kong using their Bitcoin holdings. Investors from countries and regions that have not yet issued ETFs, such as Singapore and the Middle East, have also shown keen interest. Despite the large spot Bitcoin ETF market in the United States, Hong Kong’s cash and physical subscription model and trading during Asian hours are expected to attract many American investors. Several family offices in Asia and overseas have also expressed interest in spot crypto ETFs.

Physical subscription, a pioneering initiative for Hong Kong ETFs, allows investors to transfer their coins to OSL through a brokerage firm, which then transfers the equity to the fund’s custody account. OSL has stringent anti-money laundering processes in place, requiring investors to connect through a brokerage firm to open an account and undergo whitelist verification for their wallets. Only wallets that have passed the verification and have no suspicious transactions in their past can transfer coins.

Currently, mainland Chinese investors are not allowed to invest in Hong Kong’s cryptocurrency spot ETFs. However, Hong Kong’s qualified investors, institutional investors, retail investors, and international investors who meet the regulations can all invest in these products.

Regarding the potential impact of the United States determining Ethereum as a security, Wayne Huang emphasized that it would not affect Hong Kong’s Ethereum spot ETF, as the Hong Kong Securities Regulatory Commission has its own set of procedures for determining whether a virtual asset is a security and whether it can be opened to retail traders.

As of now, only Bitcoin and Ethereum meet the conditions for launching ETFs in Hong Kong. However, ChinaAMC and OSL are discussing and studying with the China Securities Regulatory Commission the process of listing other coins in compliance transactions in Hong Kong.

Looking ahead, ChinaAMC is considering launching innovative financial products related to their ETFs, such as inverse leverage and derivatives, in collaboration with investment banks and securities firms. They believe that cryptocurrency ETFs will be beneficial to cryptocurrency prices due to several factors, including increased liquidity, accelerated industry compliance, expanded funding channels, arbitrage opportunities, the influence of traditional market trading factors, and Hong Kong’s clear regulatory framework.

Despite having higher fees compared to the other two Hong Kong companies, ChinaAMC is confident in the competitiveness of its products. It cites its adherence to the standards of thematic and complex ETFs listed in Hong Kong, flexibility in trading options, and the importance of risk management and operational stability given the complexity and innovation of its offerings.

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