Hong Kong ETFs spark fee competition in crypto sector

Hong Kong’s financial landscape is poised for a significant shift as it gears up to welcome new Bitcoin and Ethereum exchange-traded products (ETFs), scheduled to start trading on April 30, 2024. The Securities and Futures Commission (SFC) has greenlighted ETFs from China AMC, Harvest Global Investments, and a collaboration between Bosera and HashKey Capital.

The Bank of China International-Prudential Trustee Limited (BOCI-Prudential) will serve as the custodian for these funds, aimed at mirroring the performance metrics from the CME CF Bitcoin Reference Rate and the CME CF Ether-Dollar Reference Rate.

Competitive fee structures to attract diverse investors

These ETFs will not only enhance the digital assets landscape but also ignite fee-based competition among fund managers. China AMC has set its management fee at 0.99%, while Bosera and HashKey are offering a more appealing rate of 0.6%. However, Harvest Global Investments is looking to disrupt the market by introducing a six-month fee waiver, after which it will only charge a management fee of 0.3%. Such competitive pricing is anticipated to incite a robust fee war in Hong Kong’s burgeoning digital asset sector, as noted by James Seyffart, an analyst from Bloomberg Intelligence.

Hong Kong’s ETFs: Pioneering new strategies in web3 investment

The introduction of these ETFs not only signifies a major milestone in financial innovation but also bolsters Hong Kong’s objective to establish a dynamic web3 ecosystem. According to Zhu, the Head of Digital Assets and Family Office Business at China AMC, these ETFs will provide a secure and efficient means for both retail and institutional investors to engage with cryptocurrencies within a regulated framework.

Zhu highlighted the “in-kind” nature of these ETFs, allowing coin holders to seamlessly convert their digital assets into regulated investment vehicles. This strategic move is expected to catalyze the development of new digital asset management strategies and set performance benchmarks for cryptocurrencies in regulated formats, promoting a safer and more structured approach to cryptocurrency investment in Asia.

The post Hong Kong ETFs spark fee competition in crypto sector first appeared on Coinfea.