Hong Kong-based Victory Securities recently revealed its fee proposals for Bitcoin and Ethereum exchange-traded funds (ETFs), shortly after regional authorities approved the trading of these cryptocurrency products. This move by Victory Securities comes amid anticipation as the Hong Kong Securities and Futures Commission (SFC) has yet to announce 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 set at $850. This structure is also applicable to secondary market activities, where the fees are lower—0.15% for online and 0.25% for telephone transactions, providing options for various investor preferences.
Fee Comparison and Market Response
Victory Securities’ fee setup closely aligns with those implemented by U.S. asset managers for similar products. For example, Franklin Templeton has 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 on April 15 when Cointelegraph reported the region’s approval of spot ETFs for Bitcoin and Ether. Following the U.S. lead, where spot bitcoin ETFs have attracted significant capital, Hong Kong’s actions are setting a new precedent for cryptocurrency investments in Asia.
Regional Impact and Future Developments
Three offshore Chinese asset managers, including the Hong Kong units of Harvest Fund Management, Bosera Asset Management, and China Asset Management (ChinaAMC), are poised to launch their Bitcoin and Ether ETFs. These developments followed the SFC’s recent approval of three ETF providers, indicating a positive momentum within the sector.
ChinaAMC has been actively preparing for the launch of its ETFs, with OSL Digital Securities set to act as the custodian. Similarly, Harvest Global and Bosera International have received the necessary regulatory green light but have not yet commenced their ETF offerings.
Despite the excitement in Hong Kong, the broader Chinese market remains restrictive towards cryptocurrency trading, following a severe crackdown in 2021. However, Hong Kong is progressively establishing itself as a regulated cryptocurrency hub, aiming to compete internationally with major financial centers like Dubai and Singapore. The territory’s strategy includes potentially opening the doors to mainland Chinese investors for cryptocurrency investments through these newly approved ETFs.
The global financial community is closely watching Hong Kong’s innovative steps in approving the first Ether ETF, despite the U.S. Securities and Exchange Commission’s reluctance 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 bring more traditional investors into the fold, providing them 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 see a similar influx, permanently reshaping investment in the region.
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