Innovative Pathways: Hong Kong Navigates 'In-Kind' Bitcoin Spot ETFs Approval

Hong Kong regulators are considering approving Bitcoin spot ETFs for public trading, potentially adopting an "in-kind" redemption model. Unlike the US, where Bitcoin ETFs typically use an "in-cash" model, Hong Kong may allow market makers to redeem shares for Bitcoin directly. This approach, advocated by analysts like Rebecca Sin, could offer advantages such as lower transaction costs and resistance to market manipulation. Additionally, it might attract significant assets under management, potentially mirroring the success of US-based ETFs, which have reached a combined size of $62 billion. Chinese asset manager Harvest Global Investments and Hong Kong-based Venture Smart Financial Holdings have applied to launch Bitcoin spot ETFs in the region, indicating growing interest in cryptocurrency investment products.