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Hong Kong bitcoin ETFs could lead to a potential fee war

Competition could result in lower fees, which would benefit investors, but could negatively affect fund management companies’ profits.

Date: 2024-04-25 Author: Marek Stiller
Hong Kong bitcoin ETFs could lead to a potential fee war

The Hong Kong Securities and Futures Commission (SFC) has approved three Bitcoin and Ethereum exchange-traded funds (ETFs) that will begin trading on April 30.

According to a recent social media post by Bloomberg Intelligence ETF analyst James Seyffart, the ETF issuers disclosed their fees, including one of just 0.3% after a six-month exemption.

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The issuers, China Asset Management Co. (China AMC), Harvest Global Investments and Bosera International and HashKey Capital, willhave Bank of China International-Prudential Trustee Limited (BOCI-Prudential) as their depositary.

The approved ETFs aim to deliver investment performance closely tracking Bitcoin and Ethereum, as measured by the CME CF Bitcoin reference rate and the CME CF Ether-Dollar reference rate, respectively.

A table provided by Seyffart shows that China AMC will charge a 0.99% management fee, Bosera and HashKey will charge a 0.6% fee, while Harvest Global offers a six-month waiver followed by a 0.3% fee.

“A potential fee war could erupt in Hong Kong over Bitcoin and Ethereum ETFs,” Seyffart said.

China AMC will offer innovative investment opportunities

In its announcement of the China AMC approval, the company indicated that “trading on the Hong Kong Stock Exchange (HKEX) is expected to commence on April 30, 2024″ as the first of its kind in the Asian market.

“Bitcoin and Ether ETFs offer retail and institutional investors a safe, efficient and convenient way to invest in virtual assets within a regulated framework,” said China AMC’s Director of Digital Assets and Head of Family Business Office Thomas Zhu.

“The in-kind feature also attracts coin holders by offering the ease of converting coins into fully regulated ETFs managed by professional fund managers and regulated depositories,” Zhu said.

China AMC believes that in line with Hong Kong ‘s ambition to develop a vibrant web3 ecosystem, it is well positioned to develop innovative investment offerings and strategic differentiation to help clients achieve their investment goals.

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Marek Stiller
Marek Stiller
Founder of the "Cryptocurrency for Beginners" channel on YouTube. He collaborates with Łukasz to form the Arena Trading group, while at the same time being passionate about blockchain technology. His knowledge and experience in the cryptocurrency industry help beginner investors better understand this dynamic market.
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