Hype around spot ETFs has roiled the entire crypto industry, with most tokens crossing several unprecedented milestones. Bitcoin crossed the $44,000 mark, its highest trading price in the past year.

Despite China’s tough stance on cryptocurrencies, Hong Kong eased regulations in mid-2022.

Hong Kong regulators’ positive response to cryptocurrencies has attracted hundreds of cryptocurrency companies to register with relevant regulators. 

If the US Securities Regulatory Commission does not approve the ETF application, Hong Kong may become the second place for ETF registration. Hong Kong spot ETF registrations have increased significantly in the past few days.  

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

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

Hong Kong regulators have reviewed their existing regulations on Bitcoin spot ETFs and expressed a willingness to study cryptocurrency spot ETFs, according to a joint notice. 

While Hong Kong is vying for the label of “cryptocurrency hub,” Singapore has attracted numerous global players in the cryptocurrency and Web3 space.

However, the city-state has suffered multiple crises involving cryptocurrency players in recent years, including the failures of Three Arrows Capital, Vauld and Hodlnaut. The Monetary Authority of Singapore is committed to strict regulatory requirements.

US Spot ETF Overview 

While the SEC emphasizes cash redemptions for spot Bitcoin ETFs, the SEC said physical and cash subscriptions and redemptions are allowed.

Proponents believe the introduction of U.S. spot ETFs will usher in a new generation of investors, potentially generating more than $50 billion in demand. 

A new wave of ETF filings driven by asset management giant BlackRock Inc. has raised hopes of final approval from the U.S. Securities and Exchange Commission after more than a decade of denials, boosting Bitcoin's gains since June. It's up 20% since mid-month.

Banking giant JPMorgan Chase & Co. has also joined the ETF race. The increased interest in ETFs suggests that any U.S. spot Bitcoin ETF liquidation would be transformative for the market only if similar products have been operating in Canada and Europe for years without significant inflows.

The U.S. Securities and Exchange Commission must re-evaluate why it rejected Grayscale’s request to convert its Bitcoin trust into an exchange-traded fund (ETF), according to a federal court ruling. 

The decision further noted that the SEC’s denial was “arbitrary and capricious” because it failed to explain the disparate treatment of similar products such as spot- and futures-based Bitcoin exchange-traded funds and Bitcoin ETFs.

Disclaimer

The views and opinions expressed by the author or any person named herein are for informational purposes only and do not constitute financial, investment or other advice. Investing in or trading cryptocurrencies or stocks carries a risk of financial loss.