Investors in mainland China are likely to face difficulties purchasing spot Bitcoin and Ethereum ETFs listed in Hong Kong due to restrictions on investing in virtual assets, according to Bloomberg ETF analyst Eric Balchunas.
Despite the potential for individual investors to use the $50,000 remittance quota to apply for these ETFs, Balchunas suggests that most will not choose that route. Additionally, the QDII (Qualified Domestic Institutional Investor) quota, another possible avenue for investment, is unlikely to be approved for virtual asset ETFs given the lack of clear regulatory guidance, according to the analyst.
Management fees for new ETFs are expected to be around 1-2%. For example, CSOP's Bitcoin Futures ETF (3066 HK) and CSOP's Ethereum Futures (3068 HK) ETF are estimated to have a 2% surcharge. In comparison, Samsung's Bitcoin Futures ETF charges a lower fee of 0.95%.
Hong Kong is slowly trying to establish itself as a regulated cryptocurrency hub to compete with places like Dubai and Singapore.
Hong Kong will be one of the first places in the world to approve an Ethereum ETF. The U.S. Securities and Exchange Commission has not yet approved such a product.
*This is not investment advice.