香港个人散户可用证券户口投资现货比特币、以太坊ETF

The launch of Bitcoin and Ethereum spot ETFs in Hong Kong is imminent.

According to previous reports, the early stage of the Bitcoin spot ETF project has had detailed communication and plans with the Hong Kong Stock Exchange, and the entire process is expected to be completed in about 10 days. The Securities and Futures Commission originally planned to complete the listing of the Bitcoin spot ETF around April 25th at the latest by the end of April; the listing of the Ethereum spot ETF is expected to land in May.

Different from the past when individual retail investors needed to open an account on a virtual asset trading platform, ETF trading only requires a traditional securities account, providing many conveniences for novice individual retail investors in asset security, private key custody, wallet management, and trading. Industry insiders generally believe that this change in investment methods will create a bridge between traditional and virtual asset markets, and will inject more fresh blood into the virtual asset market.

Hong Kong individual investors can use securities accounts
to invest in Bitcoin and Ethereum spot ETFs

According to a report from Hong Kong's TVB News, at the current stage, investors who want to purchase virtual assets need to open an account at a virtual asset exchange; but with Huaxia, Boshi, and Jia Shi Fund companies announcing that they have obtained the approval of the Securities and Futures Commission and are collaborating with two licensed exchanges in the market to launch Bitcoin and Ethereum spot ETFs, individual investors who have obtained legal status in Hong Kong, or other individuals with overseas legal status, can directly use a securities account in Hong Kong to invest in Bitcoin and Ethereum spot ETFs, without the need to open an account at an exchange.

Aston Chiu, Managing Director and Head of Regulatory Affairs at OSL, said: "In the past, investors were concerned about security, or were not familiar with platforms they had not encountered before; now, by investing through the most familiar channels and using securities accounts that were previously commonly used, there is definitely an appeal. For the investors, to some extent, there is an added layer of confidence, with very well-known fund managers managing the products, ensuring the security of the products and their linkage with the index."

Blockchain technology consultant Li Sicong said: "The Bitcoin spot exchange-traded fund (ETF) has been launched in the United States in the past few months. When they launch the spot ETF, the entire Bitcoin market is very 'fierce.' The United States has not yet traded Ethereum spot. Hong Kong is ahead of the United States in this regard. Some things that cannot be bought in the United States, can they be purchased through this legal channel in Hong Kong? It's possible."

Raymond Ng, a member of the Election Committee of Hong Kong, said: "Some companies and families are very eager to participate, open a wallet, and don't know how to open an account. It's very complicated for them, but they can participate in the existing market. Recently, there was a lot of visitors during Web3 congress, and they are high spenders. That week, hotel rooms and high-end restaurants were also doing quite well, and this aspect can cause some new impacts."

Physical redemption is expected to increase
liquidity and arbitrage opportunities

The Bitcoin and Ethereum spot ETFs in Hong Kong not only give individual retail investors the opportunity to invest in virtual assets. What is more noteworthy is that, compared to the U.S. market, which only supports cash redemption for ETFs, physical redemption will provide Hong Kong's individual investors with more diverse and suitable investment choices.

On the one hand, physical redemption ETFs will open a compliant "withdrawal" channel for Bitcoin and Ethereum. Especially for institutions and high-net-worth investors, converting Bitcoin into ETFs in a similar fixed ratio can effectively avoid potential frozen card issues when "withdrawing" through exchanges; it can also reduce the security risks of wallet and private key management, further protecting their asset security.

On the other hand, the potential arbitrage opportunities are also worth paying attention to. There are many secondary market brokerages, with a large number of users and significant differences in fund sizes. After acquiring ETF shares through physical purchase in the primary market, as long as there is a premium in the secondary market, they can be sold for a profit; even if the performance in the secondary market is not good, using the "in and out" method can still retain virtual asset spot chips, and investors can effectively control the risk of loss.

Victory Securities is the first securities firm in Hong Kong that can subscribe to Bitcoin and Ethereum in the primary market. Currently, Victory Securities have been approved for Hong Kong virtual asset license No.1 (virtual asset trading), No.4 (virtual asset consulting services), and No.9 (virtual asset management services), and is also the first brokerage firm in Hong Kong to conduct virtual asset business for retail investors. Prior to the launch of virtual asset spot ETFs, Victory Securities seized the opportunity to launch the VictoryX VictoryPass App, which combines virtual asset, Hong Kong stock, and U.S. stock investments, and the further optimization of account opening and subscription processes will bring rare market opportunities to Victory Securities.

It must be noted that mainland Chinese users cannot directly open an account with Victory Securities. When submitting an account opening application, in addition to a mainland ID card, they need legal proof of stay and residence overseas, such as a Hong Kong talent ID card, work visa, e-pass, Thailand LinkedIn visa, etc.

Can Hong Kong surpass the United States?

The trading costs of the Bitcoin spot ETF in Hong Kong may be slightly higher than the U.S. market: on one hand, the SFC requires insured custody of virtual assets; two: the SFC requires institutions to cooperate with ETF index providers. Although it is beneficial for protecting the security of investor assets, the overall high cost makes the trading fees of the Hong Kong Bitcoin spot ETF not competitive.

However, on the other hand, the listing of the Ethereum spot ETF and physical redemption has brought new opportunities to Hong Kong. In addition, the regulatory framework in Hong Kong is clearer and more powerful in terms of regulating virtual assets, which also benefits the industry in continued innovation.

Even though the capital size of the Hong Kong market is far from that of the United States, the listing of virtual asset spot ETFs in Hong Kong will still help Hong Kong attract funds and solidify its leading position in Asia. The world order symbolized by the East and the West has already taken shape.

Will Hong Kong be able to compete with the United States in the status of the world's virtual asset center with the launch of the ETF? It will be clear after 2 months of listing.