The Securities and Futures Commission (SFC) of Hong Kong has become the latest regulatory body to approve the first batch of regulated exchange-traded funds (ETFs) for spot Bitcoin and Ethereum trading. However, approvals for at least three overseas Chinese asset management companies remain conditional.

Conditional Approval for Crypto ETFs

While regulatory authorities have confirmed conditional approvals, no details regarding the ETFs have been disclosed. It is reported that regulatory conditions include payment of fees, submission of documents, and obtaining approval for listing on the Hong Kong Stock Exchange.

Cryptocurrency ETFs listed on stock exchanges can be traded through regular brokerage accounts without the need to create cryptocurrency trading accounts or use custodial services. These investment products reduce the barriers and complexities of investing in cryptocurrencies. Additionally, the Hong Kong branches of Chinese asset management companies have been approved to offer virtual asset management services.

"The introduction of virtual asset spot ETFs not only provides investors with new asset allocation opportunities but also strengthens Hong Kong's position as an international financial center and hub for virtual assets," said the China Tai Fund Management Company.

Rising Demand for Cryptocurrencies

This approval in Hong Kong comes after the U.S. Securities and Exchange Commission (SEC) granted approval for 11 Bitcoin ETFs in one go, approximately three months ago, and is the result of years of effort by multiple companies. However, despite multiple applications, the U.S. has not approved any Ethereum ETFs.

While the U.S. green light for Bitcoin ETFs sparked a surge in cryptocurrency prices, the latest approval in Hong Kong has not had the same effect. As of the reporting time, the trading price of Bitcoin is below $63,000 per coin, with its peak price being around $74,000 per coin.

In addition to the U.S. and Hong Kong, spot Bitcoin ETFs are also listed on exchanges in eight other jurisdictions, including Canada, Germany, Jersey, Switzerland, Australia, and three other locations. However, these markets are relatively small, and demand for these cryptocurrency tools remains low.