In the wake of the ETF developments in the United States, Venture Smart Financial Holdings Ltd., a financial services firm based in Hong Kong, is gearing up to apply for an Ethereum exchange-traded fund (ETF). The company is also close to submitting an application for a spot Bitcoin ETF, with hopes of launching it within the first quarter. This move comes as part of a broader interest in crypto ETFs in the city.
Progress in Crypto ETF Applications
Lawrence Chu, the Chairman of VSFG, revealed that the firm is at the final stage of its application process for the Bitcoin ETF, which is 95% complete. The submission to the Hong Kong Securities and Futures Commission is imminent, following thorough regulatory discussions. Chu also mentioned the firm’s plans to pursue an Ethereum ETF in the second quarter, contingent on regulatory dialogue.
The interest in crypto ETFs in Hong Kong is growing, with about 10 fund companies exploring the possibility of launching such products. Livio Weng, COO of HashKey, a Hong Kong crypto exchange, confirmed this trend last month, highlighting the city’s burgeoning crypto ETF scene.
Chu anticipates a potential fee reduction competition among asset managers in Hong Kong, similar to the trend in the US market. He notes that while several ETFs are expected to emerge, VSFG’s role is more nuanced as they aim to assist other ETF issuers in entering the market, positioning themselves as a service provider rather than a direct competitor.
Despite the enthusiasm, there is a knowledge gap in Hong Kong’s ETF industry, as most issuers lack dedicated crypto asset teams. Chu points out that while there is a licensing requirement in Hong Kong, the real competition will be in marketing strategies among ETF issuers, with VSFG facilitating their entry into the market.
