Victory Securities Unveils Fee Structure for Bitcoin and Ethereum ETFs in Hong Kong

Following the approval of Bitcoin and Ether spot exchange-traded funds (ETFs) in Hong Kong, Victory Securities has disclosed its fee structure. The fees range from 0.5% to 1% for primary market transactions and 0.15% to 0.25% for secondary market trades. This aligns with fee structures implemented by US asset managers for similar products, such as Franklin Templeton's 0.19% fee for its spot Bitcoin ETF. Hong Kong is emerging as a potential hub for cryptocurrency investments in Asia, with three Chinese asset managers preparing to launch their ETFs following the approval of three ETF providers by the Securities and Futures Commission (SFC).

Victory Securities Unveils Fee Proposals for Bitcoin and Ethereum ETFs in Hong Kong

Hong Kong-based Victory Securities has released its fee structure for Bitcoin and Ethereum exchange-traded funds (ETFs), amidst anticipation surrounding the Securities and Futures Commission's (SFC) approval of these cryptocurrency products.

Fee Structure

According to a report shared by blockchain reporter Colin Wu, fees for purchasing Bitcoin and Ethereum ETFs in the primary market range from 0.5% to 1% of the total transaction, with a baseline fee of $850. These fees apply equally to secondary market activities, albeit at lower rates - 0.15% for online and 0.25% for telephone transactions.

Comparison with US Market

Victory Securities' fee structure aligns closely with those established by US asset managers for similar products. Franklin Templeton's spot Bitcoin ETF holds a lower fee of 0.19%, while others range between 0.20% and 0.90%. In contrast, the Grayscale Bitcoin Trust (GBTC) charges a higher fee of 1.5%.

Regulatory Landscape in Hong Kong

Hong Kong's regulatory environment for cryptocurrency investments has taken a significant step forward with the SFC's approval of spot ETFs for Bitcoin and Ether. This move follows the lead of the US market, where spot Bitcoin ETFs have attracted substantial investment.

Regional Impact

Three offshore Chinese asset managers - Harvest Fund Management, Bosera Asset Management, and China Asset Management (ChinaAMC) - are poised to launch their Bitcoin and Ether ETFs, capitalizing on the SFC's recent approval of three ETF providers. ChinaAMC plans to use OSL Digital Securities as the custodian for its ETF. Harvest Global and Bosera International have also received regulatory approval but have not yet commenced their ETF offerings.

China's Stance on Cryptocurrencies

Despite the excitement in Hong Kong, the broader Chinese market maintains a restrictive stance towards cryptocurrency trading following a severe crackdown in 2021. Hong Kong, however, is positioning itself as a regulated cryptocurrency hub, aspiring to rival established financial centers such as Dubai and Singapore. The territory's strategy includes potentially opening the doors to mainland Chinese investors for cryptocurrency investments through these approved ETFs.

Global Significance

The global financial community is observing Hong Kong's progressive approach in approving the first Ether ETF, despite the US Securities and Exchange Commission's hesitancy to approve a similar product. Asset managers and investors are adapting their strategies to align with these developments, aiming to leverage the opportunities presented by Hong Kong's evolving regulatory framework.

Impact on Crypto Market

As the cryptocurrency market gains maturity, the introduction of ETFs in Hong Kong is predicted to attract traditional investors, providing them with a secure and regulated means of exposure to cryptocurrencies. With billions of dollars flowing into spot Bitcoin ETFs in the US, Hong Kong's market may experience a similar influx, potentially reshaping investments in the region.