Harvest Fund aims to launch the first Bitcoin ETF in Hong Kong

Harvest Fund has recently submitted documentation for a Bitcoin spot ETF at its headquarters in Hong Kong. 

Specifically, the asset manager aims to launch the first ETF of this kind in the city shortly after the Lunar New Year celebrations, scheduled for February 10th of this year. Let’s see all the details below. 

Harvest Fund applies for a spot Bitcoin ETF: the details 

As anticipated, the Hong Kong branch of Harvest Fund Management, one of the leading Chinese asset managers, formally submitted a request for a Bitcoin-focused spot exchange-traded fund (ETF) to the local financial regulatory authority on Friday. 

This signals a possible preparation by Hong Kong to welcome its first group of spot ETFs dedicated to cryptocurrencies.

According to Tencent News reports today, Harvest has filed an application for a Bitcoin spot ETF with the Securities and Futures Commission (SFC).

In particular, with the aim of launching the first ETF of this kind in the city immediately after the Lunar New Year holidays, set this year for February 10th.

At the beginning of the month, Livio Weng, Chief Operating Officer of the Hong Kong-based cryptocurrency exchange HashKey, stated that about ten fund companies were exploring the opportunity to launch potential spot crypto ETFs in the city.

According to Bloomberg, Venture Smart Financial Holdings Ltd. (VSFG), based in Hong Kong, has stated that it aims to launch its bitcoin spot ETF within the first quarter.

Stablecoin: interest from Harvest Global Investments, RD Technologies, and VSFG

Meanwhile, Hong Kong is stepping up efforts to implement rules on stablecoins with various companies.

Among these, we see Harvest Global Investments, RD Technologies, and VSFG, interested in experiments related to these cryptocurrencies, according to Bloomberg.

These companies are currently in contact with the Monetary Authority of Hong Kong, the de facto central bank of the city, to discuss potential stablecoin evidence. 

Sean Lee, senior consultant and head of stablecoins at VSFG, has revealed that the stablecoin sandbox process is expected to begin in the first quarter, with a projected duration until the first half of 2024.

VSFG has expressed its commitment to support Hong Kong as an international center for virtual assets, and its dedicated division, IDA, has planned to submit an application for inclusion in the sandbox along with consortium partners. 

This, according to Lee, will demonstrate the potential of programmable digital money while respecting prudential requirements.

A spokesperson for the HKMA has confirmed that the sandbox agreement is aimed at fiat reference stablecoin (FRS) issuers who demonstrate genuine interest and a reasonable plan for issuing FRS in Hong Kong. 

Even Charles Schwab is considering the possible entry into Bitcoin ETFs 

Analysts predict that Charles Schwab, a multibillion-dollar asset manager, is carefully considering the opportunity to make a strategic entry into the competitive world of Bitcoin ETFs.

While Fidelity and BlackRock are fighting a fierce battle for dominance in the sector, Schwab has taken a cautious approach, allowing its clients to access approved Bitcoin spot ETFs without rushing to develop its own proprietary offerings.

However, analysts suggest that this cautious stance could soon change, with Schwab potentially entering the ETF competition in the near future. 

Eric Balchunas, senior ETF analyst at Bloomberg, stated in an interview with RIABiz that Schwab’s patient approach could prepare them to offer a product with lower fees compared to competitors. 

Therefore, potentially reshaping the dynamics of the industry thanks to its wide customer base.

Balchunas has emphasized that one of the main differences among existing Bitcoin ETFs is the price, and that Schwab could leverage this factor to launch low-cost products. 

It has also hypothesized that Schwab could surprise the market by offering a product with fees as low as ten basis points in a few months. 

The analyst finally mentioned the example of Grayscale, which currently manages an ETF with a substantial commission of 150 basis points, while Fidelity’s Bitcoin ETF, with a modest commission of 25 basis points, is attracting significant capital inflows.