Spot Bitcoin ETFs Gain Momentum: U.S. Approval Sets the Stage for Asia’s Regulatory Shift

The eagerly anticipated approval of spot Bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) is poised to catalyze regulatory advancements across Asia.

Analysts believe that the U.S. approval, while providing a competitive edge, could also spur momentum for Bitcoin ETF approvals in regions like Australia, Hong Kong, Singapore, and Japan. Australia, in particular, is anticipated to lead the way, with approval expected in the first or second quarter of 2024. Other nations, including the U.K., Hong Kong, Singapore, and Japan, might implement policies to safeguard against fund outflows from large financial institutions, aligning with the U.S. regulatory framework.

Australia is in the lead

Australia is taking the lead in the approval process for Bitcoin ETFs, with the Australian Securities Exchange (ASX) expected to grant approval in the “first or second quarter of 2024,” according to Liam Hennessy, a lawyer based in Brisbane at Clyde & Co.

Hennessy, speaking with CoinDesk, stated, “Australia is definitely leading over Hong Kong and Singapore at this stage,” highlighting the prominence of the Monochrome Bitcoin ETF, which has held the top position since its application in July 2023.

Australia already hosts two exchange-traded products providing exposure to spot crypto assets on Cboe Australia. However, the focus has shifted towards the potential launch of a similar product on ASX, the larger rival of Cboe Australia, due to the anticipation of larger trading volumes.

The Australian Securities and Investment Commission (ASIC), acting as the market regulator, effectively permitted such products in 2022. Monochrome Asset Management is optimistic about the Monochrome Bitcoin ETF being quoted in the second quarter of the year, as expressed by Derek Vladimir Henningsen, the general counsel, and head of Legal and Compliance at the digital asset management firm.

Henningsen noted that the ASX, being a fast follower, may find assurance in the U.S. approval. Although the exact number of applicants for a spot Bitcoin ETF-like product in Australia is not publicly disclosed, reports indicate a lineup of Bitcoin ETFs awaiting approval on the ASX.

Hong Kong, Singapore, and the UAE

Hong Kong, Singapore, and the UAE have aspired to establish themselves as prominent crypto hubs globally but have yet to witness the introduction of Bitcoin ETFs in their respective regions.

Johnny Ng, a vocal advocate for crypto and a Hong Kong lawmaker, expressed his views shortly after the U.S. approvals, emphasizing that “Hong Kong must boldly lead in the realm of virtual assets” and actively support the implementation of spot ETFs without delay. Hong Kong’s pursuit of reclaiming its status as a crypto hub involves the introduction of a new licensing framework facilitating regulated operations for crypto exchanges. The region is also open to reviewing applications for spot crypto ETFs.

H.B. Lim, the Managing Director of APAC for BitGo, a Bitcoin custodian for Hashdex, one of the applicants for a spot Bitcoin ETF, believes that Hong Kong is poised to be the next to approve spot crypto ETFs. Lim, drawing on his regulatory experience in Singapore and Abu Dhabi, suggests that U.S. approvals might lead Family Offices and High Net Worth Individuals to avoid questioning why crypto was not part of their portfolio in the past. Hong Kong’s robust financial center reputation, coupled with its strategic position and government support for web3, makes it an attractive destination for spot crypto ETF issuers.

Singapore, in its efforts to strike a balance between favorable regulations and protection, has exhibited a fluctuating stance on crypto. Analysts posit that U.S. approvals could be the catalyst Singapore needs to embrace products like Bitcoin ETFs. Danny Lim, a contributor at MarginX, highlights Singapore’s desire to attract flows from a larger market like the U.S., leveraging the liquidity from across the Pacific.

The Monetary Authority of Singapore (MAS) spokesperson cautioned that spot Bitcoin ETFs are not approved for retail investors, emphasizing the need for extreme caution when trading in such ETFs in overseas markets.


Disclaimer: Not Investment Advice

it’s crucial to understand that the information provided here is not to be construed as investment advice. The crypto market is dynamic and highly speculative, and decisions should be made based on thorough personal research and consideration of individual risk tolerance. Always consult with financial professionals and conduct your own due diligence before making any investment decisions. The intention of this exploration is to present insights and trends, not to provide specific investment recommendations.

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