April 30th will be a historic day for the virtual asset market in Hong Kong. According to Koala Finance, the Hong Kong Stock Exchange has confirmed that the first batch of virtual asset spot ETFs in Asia will be listed on April 30th, opening up new investment opportunities.
Bosera HashKey, Huaxia, and Harvest have been included as qualified securities in the Central Clearing and Settlement System of Hong Kong. On April 26th, the Hong Kong Stock Exchange announced the inclusion of Bosera HashKey Bitcoin ETF shares, Bosera HashKey Ether ETF shares, Huaxia Bitcoin ETF shares, Huaxia Ether ETF shares, Harvest Bitcoin Spot ETF shares, and Harvest Ether Spot ETF shares as qualified securities in the Central Clearing and Settlement System.
The Bosera HashKey Bitcoin ETF shares and Bosera HashKey Ether ETF shares have a trading unit of 10 shares and accept both Hong Kong dollars and US dollars. Investors who want to purchase Bosera HashKey Bitcoin Spot ETF shares need to have a securities account and submit a “creation order” through their securities broker on T-day, while also depositing cash in their account. They will receive the ETF shares on T+2 days. For redemption, investors can choose to sell in the primary or secondary market. If they choose to redeem in the primary market, they need to submit a “redemption order” through their securities broker on T-day. Cash redemption will be received on T+3 days, while physical redemption will be received immediately on T+0 day.
The Harvest Bitcoin Spot ETF shares and Harvest Ether Spot ETF shares have a trading unit of 100 shares and accept both Hong Kong dollars and US dollars.
The Huaxia Bitcoin ETF shares and Huaxia Ether ETF shares have a trading unit of 100 shares and accept Hong Kong dollars, US dollars, and Chinese yuan.
These ETFs are expected to be listed and traded on the Hong Kong Stock Exchange on April 30, 2024, and will be included as qualified securities in the Central Clearing and Settlement System on the same day.
The launch of these virtual asset spot ETFs introduces a globally innovative physical creation and redemption mechanism, providing investors with greater trading flexibility and offering new investment channels for global investors to explore digital assets.
How does the physical creation and redemption mechanism of the Hong Kong virtual asset spot ETF work?
The physical creation and redemption mechanism of the virtual asset spot ETF is an innovative trading method that provides investors with more flexible options. Here is how it works:
1. Creation: Investors purchase a certain quantity of ETF shares through their securities broker or the exchange. Once the ETF manager receives the creation request, they will purchase the corresponding quantity of virtual assets (such as Bitcoin or Ether). These virtual assets are stored in a dedicated custodial account as the supporting assets for the ETF shares.
2. Redemption: Investors can redeem their ETF shares at any time. The ETF manager will transfer the corresponding quantity of virtual assets to the investor based on the redemption request. The redeemed virtual assets can be used for direct trading or holding.
3. Physical Delivery: The physical creation and redemption mechanism means that there is a one-to-one correspondence between the ETF shares and the actual virtual assets. When investors create or redeem ETF shares, the ETF manager will purchase or sell the corresponding quantity of virtual assets based on the market price. This mechanism ensures that the net asset value of the ETF shares remains consistent with the value of the actual virtual assets.
The physical creation and redemption mechanism of the Hong Kong virtual asset spot ETF allows investors to directly hold virtual assets, avoiding the risks associated with derivatives such as futures contracts. At the same time, this mechanism enhances the liquidity of the ETF, making it easier for investors to buy or sell shares. It should be noted that the physical creation and redemption mechanism may be affected by market volatility and liquidity. Investors should carefully consider market risks and make choices based on their own needs.
What are the impacts and significance of the Hong Kong virtual asset spot ETF listing?
The listing of the virtual asset spot ETF in Hong Kong is a historic move that may have multiple impacts on the virtual asset market:
1. Increased Market Liquidity: The launch of the virtual asset spot ETF will provide investors with a more convenient trading channel, potentially attracting more funds to flow into the virtual asset market and increasing market liquidity.
2. Diversified Investment Options: The listing of spot Bitcoin and spot Ether ETFs provides investors with diversified investment choices. This helps to reduce investor risks and promotes the development of the virtual asset market.
3. Enhanced International Recognition: The launch of the first virtual asset spot ETF in the Asian market signifies Hong Kong’s position and influence in the virtual asset field. This is expected to attract more international investors and enhance the international recognition of virtual assets.
4. Innovation and Physical Creation and Redemption Mechanism: The virtual asset spot ETF adopts a globally innovative physical creation and redemption mechanism, providing investors with more flexible trading methods. This innovative mechanism may impact the design and development of other virtual asset products.
5. Changes in Regulatory Environment: The approval of the virtual asset spot ETF may draw more attention from regulatory authorities to the virtual asset market. Changes in the regulatory environment may affect the development of the virtual asset market and investor confidence.
In summary, this move is expected to have a positive impact on the virtual asset market, but close attention should be paid to market changes and adjustments in regulatory policies.
Source: https://mp.weixin.qq.com/s/itdL4LUqTEjpYEI7c0mveQ
