Hong Kong Financial Firm to Debut Bitcoin ETF in Q1

Hong Kong-based financial firm Venture Smart Financial Holdings Limited (VSFG) is set to introduce a bitcoin exchange-traded fund (ETF) in the first quarter of this year. Their goal is to reach $500 million in assets under management by the end of the year. VSFG, which is the first virtual asset manager to receive approval in Hong Kong, faced delays in applying for the ETF with the city’s financial regulator, the Securities and Futures Commission (SFC). However, the SFC recently issued circulars outlining the necessary steps for establishing spot crypto ETFs, signaling its readiness to receive applications. This move is part of Hong Kong’s efforts to position itself as Asia’s cryptocurrency hub. While the United States has also seen success with spot bitcoin ETFs, resulting in trading volumes exceeding $13 billion since their approval, the initial excitement has subdued, causing a dip in the bitcoin price. Catherine Clay, the global head of derivatives at Cboe Global Markets, suggested that options could play a vital role in the future of bitcoin ETFs. The Cboe has filed for options linked to bitcoin exchange-traded products, expecting to commence trading later this year. Financial futurist Dave Nadig believes that introducing alternative investment options within crypto funds could attract institutional investors and suggests that the entry of various hedge fund players into the crypto space is likely. Nadig also highlights the potential for zero-day options as a significant trend if bitcoin’s performance aligns with individual equities. While there is optimism surrounding the development of bitcoin ETFs and options, Catherine Clay advises patience as the authorization to offer options is still pending. The Cboe aims to foster an environment conducive to welcoming new participants into the cryptocurrency market.