Here are 6 key insights to know before the launch. 🧵
📈 HKEX already features #Bitcoin futures and other crypto-related contracts. Crypto ETFs first appeared on HKEX in late 2022 with the CSOP $BTC and $ETH Futures ETFs, which track CME futures.
💼 The ETF market in Hong Kong represents just 0.6% of the U.S. ETF market size. By March 2024, the U.S. had 3,457 ETFs with a total value of $8.9 trillion, whereas Hong Kong's ETF market was valued around $50 billion.
💰 The structure of Hong Kong’s spot #crypto ETFs differs significantly from those in the U.S. in terms of redemption methods. Hong Kong's are in-kind created, allowing intermediaries to provide actual cryptocurrencies like #Bitcoin, whereas in the U.S., they are cash-created, preventing intermediaries from handling $BTC directly.
🔍 While not a global first, Hong Kong's forthcoming spot Ether ETF is noteworthy, especially as the U.S. continues to delay approving its own spot Ether ETFs, expected as early as May. Canada was the first to introduce Ether futures ETFs back in April 2021 and currently hosts five Ether ETFs.
🌏 Mainland China investors are likely barred from purchasing Hong Kong’s #Bitcoin ETFs due to China's strict ban on #crypto-related activities. This ban extends to futures-based crypto ETFs listed in Hong Kong.
🌐 China AMC is the leading entity for spot #crypto ETFs in Hong Kong with $3.6 billion in assets under management (AUM), while its parent company manages $55.7 billion in mainland China. Bosera and Harvest are also significant players with $40 million and $16 million in AUM respectively.
🇭🇰 This wraps up our thread on 6 essential facts about the Hong Kong ETFs.
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