The birth of the Bitcoin spot ETF is a victory for Bitcoin and the market. Over the past decade, Bitcoin has gradually grown into one of the best assets in the world with its good performance. From the perspective of regulators, an uncontrolled asset that absorbs a large amount of capital and causes the financial system to collapse is an unbearable result.
Those in power need capital to remain in the system. The US SEC has blocked Bitcoin spot ETFs for nearly a decade, but finally chose to compromise. In contrast, Hong Kong has gone with the flow and seized the opportunity of a turning point. In the next round of compliance competition that truly opens up the market, it still has a chance to compete with the United States.
More than a dozen institutions have begun preparing to issue virtual asset spot ETFs led by Bitcoin in Hong Kong.On January 2024, 1, E-BOE Financial took the lead in announcing its plan and became the first financial institution to announce the issuance of a Bitcoin spot ETF in Hong Kong.In this article, Bailu Living Room will take a closer look at YiBo Finance to see the strength behind the applicants and make better choices.
Understanding E-Bet Finance VSFG
VSFG, abbreviated as VSFG,Including EBO Capital Asia (EBO Asia) and EBO Asset Management Co., Ltd. (EBO Asset Management), both are licensed corporations approved by the SFC to carry out Type 1 (securities trading), Type 4 (providing advice on securities) and Type 9 (providing asset management) regulated activities.
In terms of asset management business, E-BOF operates in a private banking model, providing external asset management services to private clients through internationally renowned private banks. At the same time, it focuses on private equity funds, covering various financial asset categories in Greater China, including blockchain, artificial intelligence, art investment, e-sports and virtual assets, providing direct co-investment opportunities for institutions and professional investors.
In addition, E-BOF provides one-stop solutions for institutions and professional investors to help them configure virtual assets. In the future, E-BOF will also focus on asset tokenization and digital wallet business to help investors manage diversified investment portfolios anytime and anywhere.
Zhu Chengyu is the Chairman of Renyibo Financial and has more than 15 years of investment experience. He worked as an analyst in the investment banking department of UBS (London Branch). He worked in the chairman's office of EMIMusic in London. He was the deputy director of the global asset management department of UBS (Hong Kong Branch). He is also a non-executive director of Hongdafu Holdings Co., Ltd. He obtained a Bachelor of Arts degree in Economics from the University of Chicago.
Rich experience in the field of virtual assets
E-BOM Capital Asia is the first virtual asset manager licensed by the Securities and Futures Commission in Hong Kong. It can manage investment portfolios that are 100% invested in virtual assets and has sufficient business experience in the virtual asset field.
On April 2020, 4, Arrano Capital, the Asian blockchain arm of E-Bet Capital, launched Hong Kong's first regulated virtual asset fund. The fund is a passive Bitcoin tracking fund that provides professional investors with the opportunity to invest in Bitcoin through a traditional fund structure.
On April 2021, 4, Arrano Capital announced the launch of Arrano Alpha Fund, an actively managed virtual asset fund regulated by the Securities and Futures Commission. E-Bet Asia is the fund's investment manager. Compared with the first fund, it has greater flexibility in portfolio allocation.
On June 2023, 6, Zhu Chengyu stated that YiBo Financial is preparing to apply for Hong Kong Securities and Futures Commission License No. 1 (providing automated trading services), and is also discussing with several ETF issuers and regulators in Hong Kong to list its Bitcoin tracking fund in the form of an ETF to create a larger asset scale.
Launched Bitcoin spot ETF with Value Partners
On December 2023, 12, the Hong Kong Securities and Futures Commission’s official website published the “Notice on Funds Involving Virtual Assets Approved by the Securities and Futures Commission”, preparing to accept applications for virtual asset spot ETFs; at the beginning of this year, with the US SEC approving the listing of 22 Bitcoin spot ETFs, the era of virtual asset compliance has officially begun. Hong Kong has also accelerated its efforts to seek a quick landing of Bitcoin spot ETFs in Hong Kong to consolidate its position as a financial center.
On January 2014, 1, according to Bloomberg, E-BOE Financial announced that it plans to submit an application to the Hong Kong Securities and Futures Commission, seeking to launch a Bitcoin spot ETF in Q19 2024.
On January 2024, 1, Zhu Chengyu, chairman of E-BOF, publicly revealed that E-BOF has reached a cooperation intention with a Hong Kong fund company and is preparing to submit an application for a virtual asset spot ETF, hoping to formally submit the application before the Lunar New Year and launch it in the first quarter.The initial hope is to reach US$5 million (approximately HK$39 billion) in assets under management (AUM) by the end of this year.
Regarding how Hong Kong can compete in the future, Zhu Chengyu pointed out: "The United States targets the local time zone, while Hong Kong listings can focus on the Asian time zone. Although ETFs are products open to retail investors, E-Bet Financial also negotiated with various institutional investors last year. In addition to Hong Kong, it also included institutions allowed to participate in the Mainland, mainly South Korea, Japan and Taiwan. There is a lot of demand in the entire Asian time zone, and I believe that fund companies will be interested in issuing them one after another."
“Currently, the SFC has not approved any virtual asset spot ETFs, and the industry needs time to prepare.According to the circular, virtual asset fund custody approved by the SFC is limited to virtual asset trading platforms licensed by the SFC, or banks that meet the virtual asset custody standards issued by the HKMA.It is understood that the HKMA has completed industry consultation on the guidelines for providing virtual asset custody services and is reviewing the opinions before taking further action. In other words,Currently, only local licensed virtual asset exchanges can provide custody services.”
Zhu Chengyu continued to add“Easy Finance launched a spot Bitcoin tracking product approved by the Securities and Futures Commission in 2020, which is only for professional investors. It already has experience in operating related products. The only difference is that future ETFs can be traded on the Hong Kong Stock Exchange.ETFs will have retail investor-related issues, and exchanges are more rigorous in protecting investors, for example, "not just one index, but three reference prices." Existing futures products are priced by the CME, and many virtual asset exchanges have a lot of activity in spot trading."
Value Partners Hong Kong Fund Management announced that it will join hands with E-Bet Financial. On January 2024, 1, according to the Hong Kong News, Value Partners Hong Kong Fund Management and E-Bet Financial announced the signing of a memorandum of understanding. The two parties will work together to provide retail and institutional investors with innovative investment solutions that combine virtual assets and traditional investment tools.
Value Partners has over 30 years of asset management experience in Hong Kong.As the first step of the cooperation, the two Hong Kong companies will jointly explore the launch of a Bitcoin spot ETF in Hong Kong.
Ms. Wong Wai Man, CEO of Value Partners Group, said: "As we focus on the untapped opportunities in the prevailing trend of virtual assets, in order to provide digital investment solutions to investors, we have taken a strategic move to establish a partnership with VSFG, a pioneer in virtual asset management companies in Hong Kong."
“The plan to launch a spot Bitcoin ETF marks our first collaborative initiative, allowing Hong Kong investors to gain exposure to the world’s largest digital asset while enjoying the convenience and efficiency of an ETF tool. With Value Partners’ extensive knowledge and track record in managing ETFs and VSFG’s extensive experience, we are well positioned to provide our clients with more investment options, especially in virtual assets, to help them seize market opportunities and navigate this dynamic and evolving space.”
With E-Bet Financial and Value Partners announcing their entry, the competition for Hong Kong Bitcoin spot ETF has officially begun. Who will be the next competitor? Let's wait and see.
Source: Bailu Living Room
Author: Bowen