Hong Kong finance firm VSFG aims to launch spot bitcoin ETF as early as May

Venture Smart Financial Holdings Ltd., a Hong Kong-based financial services firm, has submitted its application for a spot bitcoin exchange-traded fund — and aims to launch the ETF as early as May.

Brian Chan, group head of investment and products of VSFG, told The Block on Thursday that the team is hoping for a May launch “if all goes smoothly.”

“But we're also keeping June in our sights just to be on the safe side,” Chan said. “It's tough to pin down an exact date with regulatory processes, but we're in active discussions with the SFC. We've hit the ground running with their initial feedback and are working together closely.”

Hong Kong is paving the way for spot crypto ETFs, with the Securities and Futures Commission and the Hong Kong Monetary Authority, its de facto central bank, announcing in December that both agencies have reviewed their existing policy. The regulators published two circulars addressing the requirements for spot crypto ETFs.

Boosting demand

Bloomberg Senior ETF Analyst Eric Balchunas posted on X, citing a Bloomberg Intelligence report, that the SFC is looking to allow in-kind creations and redemptions for spot bitcoin ETFs in the second quarter of this year. That could potentially help spark assets under management and volume, Balchunas said.

“We're excited about the prospect of adding this feature for sure as it will be exclusive for the Hong Kong market and it potentially leads to higher AUM,” said Chan of VSFG. “Meanwhile, the approval would not only benefit ETF issuers but also the HKEx and VATPs and qualified Participating Dealers in Hong Kong, creating a win-win situation.”

Chan added that it's important to recognize variables at play, such as the readiness of various service providers, which “introduce a degree of uncertainty.”