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Hong Kong 2nd Most Prefered Location For Spot ETFs- Report

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Hong Kong 2nd Most Prefered Location For Spot ETFs- Report
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The hype about spot ETFs has stirred the entire crypto industry, and most tokens have crossed several unprecedented milestones. Bitcoin sailed past the $44k mark which in the past year is its highest trading price.

Despite China’s harsh stance towards crypto, Hong Kong eased the regulation in mid-2022.

Hong Kong regulators’ positive response towards crypto has attracted hundreds of crypto firms registered under the concerned regulators. 

If the U.S. SEC disapproves of the ETF applications, Hong Kong might become the second runner in ETF registrations. In the past few days, a significant surge in spot ETF registration has been seen in Hong Kong.  

The process of completing registration is insured under the guidance of the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC). 

The regulators publicly announced the ETF application on December 22, 2023. 

The joint circular reveals that both Hong Kong regulatory bodies have evaluated their existing regulations for bitcoin Spot ETFs and indicated their willingness to study cryptocurrency Spot ETFs. 

Even though Hong Kong is vying for the “crypto hub” label, Singapore has attracted numerous worldwide enterprises in the crypto and web3 field.

However, the city-state has suffered multiple crises involving crypto players in recent years, including the failures of Three Arrows Capital, Vauld, and Hodlnaut. Singapore’s Monetary Authority is committed to develop tight regulations.

U.S. Spot ETFs Overview 

While the U.S. Securities and Exchange Commission has emphasized in-cash redemption for Spot Bitcoin ETFs, the SEC has said that in-kind and in-cash subscription and redemption are permitted.

Proponents argue that introducing a U.S. spot ETF will usher in a new generation of investors, potentially generating more than $50 Billion in demand. 

A new wave of ETF applications, driven by asset management giant BlackRock Inc., has sparked hopes that the Securities and Exchange Commission would finally be approved after over a decade of denials, fueling a 20% Bitcoin rise since mid-June.

Banking giant JPMorgan too has entered the ETF race. This increase in interest in ETFs suggests that any U.S. spot Bitcoin ETF clearance will only be transformative for the market if similar products have operated in Canada and Europe for years without seeing massive inflows.

According to a federal court decision, the SEC must reevaluate why it rejected Grayscale’s request to turn its bitcoin trust into an exchange-traded fund (ETF). 

The decision further states that the SEC’s denial was “arbitrary and capricious” as it did not explain the disparate treatment of comparable products, such as spot- and futures-based Bitcoin exchange-traded funds and Bitcoin ETFs.

Disclaimer

The views and opinions stated by the author or any people named in this article are for informational ideas only and do not establish financial, investment, or other advice. Investing in or trading crypto or stock comes with a risk of financial loss. 

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