Hong Kong approves the listing of Bitcoin and Ethereum ETFs, Huaxia Fund creates new opportunities for digital assets.

Recently, Huaxia Fund (Hong Kong) announced that its Bitcoin ETF and Ether ETF have been approved by the Hong Kong Securities and Futures Commission, and will be issued on April 29, 2024, with listing on the Hong Kong Stock Exchange the following day. This marks Hong Kong as another region in the world, following the United States, to approve such products, and also means that ordinary investors can participate in digital asset-related investments by subscribing to these ETFs.

Huaxia Fund (Hong Kong) has added digital asset management services to its traditional asset management business, becoming the first approved institution among China's leading fund companies' Hong Kong subsidiaries. Through an exclusive interview with the company's head of digital asset management and family wealth management, we can learn about the latest developments in Hong Kong's digital asset sector.

Since the Hong Kong government released the policy declaration for the development of digital assets in October 2022, Hong Kong has been actively promoting itself as a global Web 3.0 center. In March of this year, the Hong Kong Monetary Authority launched three innovative sandbox projects, covering wholesale central bank digital currency, stablecoins, and the second phase of the digital Hong Kong dollar pilot program. The upcoming Bitcoin and Ether spot ETFs also reflect the Hong Kong government's support for the compliant development of the digital asset ecosystem. Huaxia Hong Kong is actively participating in this trend, conducting in-depth research on the digital asset industry, particularly in product innovations like real-world asset tokenization and Bitcoin/Ether spot ETFs, and is involved in the Monetary Authority's experimental sandbox projects.

Compared to the United States, the approach of Hong Kong regulators has significant differences and advantages. Hong Kong allows cash and physical subscriptions, and participating traders can directly use Bitcoin or Ether to subscribe to or redeem ETF shares, while the United States only allows cash transactions. Although the current market size of spot Bitcoin ETF in the United States is large, Hong Kong, as one of the first regions to approve spot Ethereum ETF and allow retail participation, may have a greater advantage.

Hong Kong has established a strict regulatory framework to protect investors. The Securities and Futures Commission requires fund management companies to have a good regulatory record and can only invest in crypto assets listed on licensed trading platforms open to the Hong Kong public. Funds are prohibited from using leverage, and there are strict regulations on custody as well. These measures aim to prevent illegal financial activities.

Currently, qualified investors, institutional investors, retail investors, and eligible international investors in Hong Kong can invest in cryptocurrency ETFs. Investors from mainland China are temporarily unable to participate; specific eligibility requirements can be consulted with relevant brokerage firms and sales channels.

For digital asset investment, it can be analyzed from three perspectives: risk defense, portfolio diversification, and investment decision-making. Bitcoin, as a decentralized digital currency, has performed well during certain financial crises. In the long term, Bitcoin has a lower correlation with traditional assets, which allows for effective portfolio diversification. However, due to its high volatility and emerging characteristics, investment decisions still require caution.

China Asset Management, as the largest ETF issuer in China, has 26 years of asset management experience and manages over 2.15 trillion RMB. China Asset Management (Hong Kong) is its wholly-owned subsidiary, established in Hong Kong for 16 years, managing multiple global or Hong Kong's largest ETF products. The team has rich international experience and stable partnerships, showing significant advantages in key indicators of ETF management.

Compared to the development of the US market, the Hong Kong digital asset ETF market also shows great potential. As one of China's largest public asset management companies and a top Chinese-funded company in Hong Kong, China Asset Management (Hong Kong) is confident about the future of Hong Kong in digital asset innovation and the development of Web3.0.

Investors should be aware that when investing in digital assets or related products such as ETFs, they should consider their own investment goals, risk tolerance, and market volatility. The high volatility of the cryptocurrency market means that high risks and high returns coexist.