Modern Australian
Monday, July 7, 2025 6:26:27 PM
Men's Weekly

.

CapBridge Shares Insights on the Recent Launch of Digital Asset ETFs in Hong Kong

SINGAPORE - Media OutReach Newswire - 26 April 2024 - CapBridge, a leading investment syndication and financial products platform based in Singapore, has shared their comments on Hong Kong's recent approval for the launch of spot Bitcoin and Ether ETFs.

The following insights were shared by Johnson Chen, CEO & Founder of CapBridge.

On April 15, Hong Kong's Securities and Futures Commission (SFC) gave the nod for the launch of spot Bitcoin and Ether exchange-traded funds (ETFs), seemingly catapulting the city into the forefront of Asia's push to integrate digital assets into mainstream investment portfolios.

Following the HK SFC's approval, several offshore Chinese asset managers — including Bosera Asset Management, Harvest Global Investments and China Asset Management — are set to launch their spot digital asset ETFs. This regulatory development, riding the tailwind of digital asset ETF developments in the US, will potentially accelerate greater adoption of digital assets in the APAC region. It potentially grants investors direct access through specified brokers, eliminating the need to buy through specialized crypto exchanges and to manage self-custody, instead utilizing regulated entities for the needed safekeeping.

Hong Kong has now knowingly set a precedent for other Asian markets, many of which have been still cautious thus far. Over the past year, Hong Kong has doubled down its efforts to drive digital asset innovation while trying to enhance its regulatory framework. This progressive approach is expected to ripple across APAC markets, including Singapore, Korea, and Japan, by drawing significant capital inflows and investments. With a combined ETF assets under management (AUM) in the APAC region said to be totaling $1.2 trillion, the APAC region presents sizable opportunities that can be further unlocked through the introduction of digital asset ETFs.

Institutional involvement

Historically, the broader adoption of digital assets like Bitcoin has been hindered by traditional finance (TradFi) players' reluctance to venture beyond their conventional investment portfolios due to complexities in acquiring, securing, managing, and transferring Bitcoin, along with regulatory uncertainties.

However, a transformative shift now seems underway, propelled by the entry of TradFi behemoths, including Blackrock and Fidelity, whose filing for a spot bitcoin ETF triggered a bullish surge in bitcoin prices. Approval of spot Bitcoin ETF applications from 11 issuers in January 2024 not only facilitates investors' access to Bitcoin without the need for direct management but also signals a new juncture for the market. The foray of TradFi players into digital assets underscores a well-trodden narrative: the imperative for market participants to engage fueled by irresistible FOMO.

The trend now echoes in Hong Kong as institutional participation gathers pace. Notably, the three asset managers granted spot digital asset ETF approval are among Greater China's largest, with a combined AUM exceeding USD $700 billion. The increased involvement of such large major institutional players is widely expected to prompt others to follow and incorporate digital assets into their portfolios.

Innovation At The Forefront

Hong Kong's recent move also showcases innovative practices. It took a step further than its US counterparts by becoming the first jurisdiction to approve spot Ether ETFs. By opening access to regulated and secure investment products tracking the price of Ether, Hong Kong's decision can potentially channel substantial investments into the world's second-largest cryptocurrency. With Ether's market value at around USD $385 billion and a market share of about 16% in the cryptocurrency market, this move could unlock further institutional participation and access, while the US SEC's current stance is still unclear on ETH ETFs.

Notably, the launch of spot Bitcoin and Ether ETFs in Hong Kong has been said to allow for in-kind creation, as opposed to just the cash-create model favored by US authorities. ETF issuers can exchange the fund's underlying assets (e.g. Bitcoin and Ether) directly with the broker dealer for ETF unit creation and redemption. As highlighted by some asset managers, the use of cash creations and redemptions, together with the in-kind model, may cause problems in keeping share prices aligned with Bitcoin's Net Asset Value (NAV) in some situations.

Currently, Asia-based investors eyeing US BTC ETFs encounter hurdles like currency conversion requirements, as these ETFs exclusively accept USD for subscriptions, along with the inconvenience of trading across different time zones. Hence, if digital asset ETFs in Hong Kong offer advantages like multi-currency subscription options and allow trading in Asia time zones, these features will streamline access to digital assets and unlock vast investment opportunities for investors based in Asia. With these HK spot ETFs potentially paving the way for additional digital asset investment products unavailable elsewhere, it's interesting to see how Hong Kong's decision influences the US's stance on digital asset ETFs and regulators in other jurisdictions.

Potential Chinese Investment

To fully grasp the implications of HK's ETF approval, one must consider its impact on mainland China investors. If access is granted to Chinese mainland investors, many of whom are actively seeking alternative havens to store their wealth alongside gold and overseas assets, it could substantially impact the influx of investment into these ETFs, keeping in mind the scale of Mainland China's ETF AUM is nearly six times that of Hong Kong.

Not all are optimistic about digital asset spot ETFs in Hong Kong. Senior Bloomberg ETF analyst Eric Balchunas noted that Chinese retail investors may lack access. Given that the Stock Connect program — typically used by mainland Chinese investors to access eligible shares listed on the Hong Kong Stock Exchange — still excludes them from digital asset ETFs, this potentially questions and casts doubt on the prospects of spot counterparts in Hong Kong. However, this doesn't necessarily diminish the significance of Hong Kong's ETF approval. While the market awaits clarity on access for mainland Chinese investors, developments in Hong Kong indicate a growing acceptance of digital assets as a legitimate asset class and governments' proactive exploration of their use cases, marking a significant step forward. Hong Kong sets a commendable example by championing innovation, which is likely to reverberate across Asia's financial ecosystem.

Johnson Chen further commented, "As we stand on the brink of a new financial era, the combination of TradFi via ETFs with digital underlying assets (instruments like Bitcoin and Ether, also affectionately bundled together and conveniently known as Web3) illustrates the convergence of two worlds. These developments exemplify how innovation, embraced by regulatory bodies and market leaders, can lay the groundwork for a more inclusive and dynamic financial future."

Disclosures: The author of this opinion article does not hold any positions in the ETFs mentioned.


Hashtag: #CapBridge #1exchange #ETFs #VirtualAsset #DigitalAsset

The issuer is solely responsible for the content of this announcement.

How Maths Tutoring Can Help Students Master Maths

Mathematics can be a daunting subject for many students, often causing stress and frustration. However, maths tutoring has proven to be an effective...

Refurbished iPads Are Better Than New Ones (Here's Why)

Image by rawpixel.com on Freepik Apple's refurbished iPad program has quietly become one of the best deals in tech. While everyone obsesses over the ...

Your Guide to Finding the Right GP: What Perth City Doctors Offer Today

Choosing a General Practitioner (GP) is one of the most important health decisions you’ll make. Luckily, Perth’s vibrant CBD now hosts a new ge...

Why Every Mining Operation Needs a Robust Safety Management System

Mining is one of the backbones of the Australian economy, particularly in Western Australia. Back in 2019-20, mining contributed 10.4% of Australia�...

Australian Classic Literature Enjoys Resurgence

Welcome back to the good old days of storytelling! As the modern world becomes increasingly more demanding, returning to childhood favourites offers...

How to Choose the Right Lawyers in Sydney for Your Situation

When faced with a legal issue, selecting the right legal representation can make all the difference. Whether you're dealing with a personal injury, ...

Building a Governance Model for Headless Content Management at Scale

Image by pch.vector on Freepik There's never been a better time to implement a headless content management system (CMS) to gain the flexibility and ...

Understanding Trade Insurance: Essential Protection for Businesses

Image by Drazen Zigic on Freepik In the current economic environment, trade insurance is an important element for companies trading both locally an...

Choosing the Right Timber for External Cladding

Timber cladding is one of those finishes that pulls double duty: it makes a building look warm and welcoming, and it quietly shields the frame from ...

Top Services Offered by Diesel Mechanics in Brisbane

Keeping a diesel vehicle running at its best takes more than the occasional oil change. When you invest in regular specialist care, you protect the ...

Top 5 Benefits of Hiring Professional House Removalists

Moving day should feel like the start of a new adventure, not the end of your patience. Yet once the settlement papers are signed and the champagne ...

Navigating the Digital Landscape: Managed IT Solutions and IT Services in Townsville

As technology advances at an unprecedented pace, companies must adapt to embrace the transformation ahead. With an evolving technology landscape, mana...

Types of Catering You Should Consider for Your Next Event

Choosing the right type of catering service can elevate your event from ordinary to unforgettable. Whether it’s an elegant wedding, corporate func...

Understanding the Benefits of Split System Installation for Your Home

Climate control is essential to maintaining comfort in your home, especially during the extreme temperatures that many regions face. Whether you’r...

Best Aluminium Window Sliding Designs for Natural Light and Airflow

Bringing natural light and airflow into a space is one of the most efficient ways to create a healthy and comfortable home. In Sydney and across Aus...

Maximising Operational Efficiency: Electric Winch Hire Australia and Hydraulic Power Pack Hire Solutions

Image by jcomp on Freepik From urban construction sites and remote mining operations to coastal maritime facilities, specialised equipment solutio...

Navigating the System: Your Guide to Support Finding Work with a Disability Around Melbourne

Image by freepik Finding the right job can be a challenge for anyone, but it can feel particularly daunting when you're also navigating life with a ...

Say Goodbye to Draughts and Hello to Savings: Your Guide to Perth Window Replacement

Image by prostooleh on Freepik Are your windows looking worse for wear? Are you paying a hefty power bill due to sneaky draughts and poor insulation...