Huobi Tech Plans To Launch Crypto ETF in Hong Kong

Key Insights:

• Huobi Tech plans on furthering its ETF business in Hong Kong.
• This crypto ETF will be for retail investors in the country.
• The lack of crypto ETF is driving the demand higher for one.

In a report from South China Morning Post, it has been revealed that Huobi Tech, is planning on widening its ETF reach in Hong Kong.

The company operates as an independent entity and is not owned or controlled by the Huobi Group, the parent company of the sixth biggest crypto exchange in the world, Huobi Global.

By launching a cryptocurrency tracking investment fund, Huobi Tech intends on bringing the opportunity of safely investing in crypto to retail investors.

Huobi Brings Crypto ETF to Hong Kong

The planned crypto ETF will be in accordance with the existing regulations for investment vehicles in the country. As described by the senior vice-president of Huobi Tech, Romeo Wang,

“all the trading and redemption done directly in Hong Kong … would give better protection to investors, as the fund will be regulated under Hong Kong law. We will keep close and positive communications with regulators including the SFC (sic).”

As currently, cryptocurrency-based exchange-traded funds are considered risky assets, The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) in February barred retail investors from accessing them. Only ‘professional’ investors were allowed to trade these ETFs.

The motive behind this was to protect investors from the risks that come with digital assets. Thus, investors with portfolios smaller than HKD $8 million ($1 million) cannot participate in these ETFs. 

Huobi Tech intends on changing that with this ETF. 

The ETF Fever

Many crypto advocates also believe that as the demand for an ETF grows from investors, existing crypto ETF providers would themselves look at finding a way to fulfill said demand.

Commenting on the same, Chris Pigott, the head of Asia ETF services in Hong Kong at Brown Brothers Harriman, said,

“More innovative products in the form of ETFs is a natural next step.”

Earlier today, FXEmpire reported about Grayscale’s CEO Michael Sonneshein’s commitment to bring a spot Bitcoin ETF to the United States.

As the decision on the approval of said GBTC ETF remains pending, Michael stated that the company is prepared even to file a lawsuit against the SEC if their ETF is rejected.

Thus it seems like the confidence in centralized systems over decentralized systems is taking over investors as well as investment vehicle providers.