On April 24th, Hua Xia Fund (Hong Kong), Jia Shi International, and Bo Shi International announced that the first batch of Hong Kong Bitcoin spot ETF, Ethereum spot ETF products applied by the three fund subsidiaries have been approved by the Securities and Futures Commission of Hong Kong and are scheduled to be issued on April 29th and listed on the Hong Kong Stock Exchange on April 30th. This is the first time such products have been introduced in the Asian market, with the aim of providing investment returns closely tied to the spot prices of Bitcoin and Ethereum (net of fees and expenses). It is believed within the industry that the issuance of Asian spot Bitcoin and Ethereum ETFs provides a safe, efficient, and convenient tool for retail and institutional investors to allocate digital assets. Specifically, on April 24th, Jia Shi International announced that the Securities and Futures Commission of Hong Kong has officially approved Jia Shi Bitcoin spot ETF and Jia Shi Ethereum spot ETF, and expects the two products to be officially listed and traded at the end of April. On the same day, Hua Xia Fund (Hong Kong) announced that Hua Xia Bitcoin ETF and Hua Xia Ethereum ETF have been approved by the Securities and Futures Commission (SFC) of Hong Kong, with issuance planned for April 29, 2024, and listing on the Hong Kong Stock Exchange on April 30, 2024. In addition, Bo Shi International also announced that two virtual asset spot ETFs jointly applied with HashKey Capital Limited have been officially approved by the Hong Kong Securities and Futures Commission (SFC). Hua Xia Fund (Hong Kong) Head of Digital Asset Management and Family Wealth Management Zhu Haokang said: the issuance of Asian spot Bitcoin and Ethereum ETFs provides an excellent tool for retail and institutional investors to safely, efficiently, and conveniently allocate digital assets. HashKey Capital pointed out that the approval of spot virtual asset ETFs and the introduction of an innovative holding subscription mechanism (allowing investors to directly use Bitcoin and Ethereum to subscribe for corresponding ETF shares) are expected to further promote the development of the Hong Kong and even the entire Asian virtual asset market, attract more global funds influx, and stimulate the underlying vitality of the Hong Kong virtual asset market. At the same time, this also demonstrates Hong Kong's open attitude and innovative spirit in the emerging financial sector and provides valuable experience for virtual asset regulation in other countries and regions. Bo Shi International and HashKey Capital stated that they will fully leverage their leading expertise and ecosystem resources in both traditional finance and the virtual asset industry to jointly promote the issuance of Bitcoin and Ethereum spot ETFs, providing investors with a safe, compliant, and convenient way to directly participate in the market of these two mainstream virtual assets. The issuance of spot virtual asset ETFs not only provides investors with new asset allocation choices but also further consolidates Hong Kong's position as an international financial center and virtual asset hub. Bitcoin spot ETF to push up Bitcoin prices It is reported that on December 22, 2023, the Securities and Futures Commission of Hong Kong issued a letter regarding the recognition of fund investment in virtual assets, clearly indicating its willingness to accept applications for the recognition of spot virtual asset ETFs. After the listing and trading of spot Bitcoin ETFs, institutions and retail investors will be allowed to invest in Bitcoin without directly holding it. Unlike the current US Bitcoin spot ETFs, Hong Kong plans not only to introduce Ethereum spot ETFs but also to allow investors to subscribe and redeem through cash or physical means. This means that a new funding channel has emerged in the virtual asset industry, and the physical subscription and redemption mechanism has brought more requirements to licensed virtual asset exchanges in Hong Kong. Approved and listed spot virtual asset ETFs must be traded on licensed virtual asset exchanges in Hong Kong. Currently, there are two licensed exchanges in Hong Kong, namely OSL Exchange and HashKey Exchange. As early as January 2024, the US Securities and Exchange Commission approved 11 Bitcoin spot ETFs at once. These Bitcoin spot ETFs attracted a large influx of funds and pushed up Bitcoin prices. However, the current Bitcoin price has dropped nearly 10% from the historical high of $73,798 in mid-March, and Bitcoin spot ETFs have also seen a slowdown in net fund inflows. After Bitcoin completed its once-every-four-year "halving" last Saturday, JP Morgan issued a warning that Bitcoin may decline after the "halving." However, Jeff Kendrick, director of digital asset research at Standard Chartered Bank, reiterated in a recent interview that his price target for Bitcoin by the end of this year is $150,000, which means Bitcoin will rise by more than double from the historical high in March. Kendrick stated that the recent decline in Bitcoin is mainly due to a slowdown in ETF fund inflows and tension in the Middle East he bluntly said that the situation in the Middle East currently "dominates" the crypto market. Looking ahead, he believes that with the continued influx of large-scale Bitcoin ETF funds, the cryptocurrency market may reverse its downward trend later this year and continue to rise. Kendrick estimates that since the approval of the US spot Bitcoin ETF in January this year, it has absorbed about $12 billion in funds. He predicts that although sentiment in the "circle of currencies" is currently cautious, once the US cryptocurrency ETF market becomes more "mature," the inflow of funds in the next two years could reach $50 billion to $100 billion.