Hong Kong’s First Crypto Futures EFTs Raise $73.6M Ahead of Launch

CSOP Asset Management, an investment advisor based in Hong Kong, will launch Bitcoin and Ether futures exchange-traded funds (ETS) on the Hong Kong Stock Exchange on Friday. However, ahead of their debut, the ETFs have raised a combined $73.6 million, with the Bitcoin futures ETF alone accounting for $53.9 million, Reuters reports.

In October last year, the United States’ first Bitcoin-linked futures EFT launched with a seed capital of $20 million after approval by the United States Securities and Exchange Commission.

The new ETFs, which are expected to be launched at HK$780 per unit, will invest in Bitcoin and Ether futures listed on the Chicago Mercantile Exchange in the United States. Bitcoin and Ether are currently the only digital assets approved by Hong Kong’s Securities and Futures Commission (SFC).

Check out this recent Finance Magnates London Summit 2022 session on the crypto market structure.

The launch of the crypto ETFs comes less than two months after the SFC decided to permit crypto EFTs in Hong Kong, diverging from the blanket ban on all crypto investments obtainable in mainland China. The Commission had said only virtual asset futures traded on conventional regulated exchanges would be permitted, with Bitcoin and Ether futures traded on CME getting the first go-ahead.

The securities regulator also previously expressed the intention to open up crypto trading services to retail customers in March 2023 to attract talent to the autonomous jurisdiction.

Crypto Market Upheaval

The expected launch of Hong Kong’s first crypto futures ETF comes in a year the cryptocurrency industry has been weighed down by big blows, the latest being the collapse and bankruptcy of crypto exchange FTX. Also, in August, Bitcoin deposits on exchanges collapsed to a two-year low. In addition, the global market capitalization of the crypto industry sank below $1 trillion, down from a market cap of over $2 trillion at the start of the year.

However, despite these trends, a new study by Eurex, one of the world’s largest derivatives exchanges, found that institutional adoption of cryptocurrency is still on track this year.

Source