HONG KONG, April 24, 2024 /PRNewswire/ — Harvest Global Investments Limited (hereafter referred to as HGI) announced today that the Securities and Futures Commission (SFC) in Hong Kong has officially authorized the Harvest Bitcoin Spot ETF and Harvest Ether Spot ETF. These products are expected to start trading on the Hong Kong Stock Exchange by the end of April. This milestone not only marks the debut of Asia’s first-mover Bitcoin and Ether Spot ETFs but also represents a significant innovation in the global financial landscape with the introduction of direct subscription and redemption using Bitcoin and Ether. This development offers global investors a regulated, transparent, and efficient new path for investment, heralding a new era in the integration of digital assets with the traditional financial system.
HGI, as a leading asset management company, was the first to file applications with the SFC for these two blue-chip cryptocurrency ETFs. The launch of the Harvest Bitcoin Spot ETF and Harvest Ether Spot ETF introduces these products as among the first in Asia to allow direct transactions using cryptocurrencies for subscriptions and redemptions. This pioneering approach not only lowers entry barriers but also enhances both investment flexibility and market transparency.
Bitcoin, often referred to as “digital gold,” and Ether, which serves as the foundational platform for smart contracts and decentralized applications, at the heart of blockchain technology. The capacity to directly use Bitcoin or Ether for ETF subscriptions and redemptions not only offers investors greater transaction flexibility but also opens up new avenues for global investors to explore innovative investment in digital assets. Market analysts widely believe that this distinctive approach will attract a more diverse investor base.
Furthermore, the launch of the Harvest Bitcoin Spot ETF and Harvest Ether Spot ETF aims to address the high operational barriers and complex management associated with traditional digital currency investments. These standardized products, soon to be listed on the Hong Kong Stock Exchange, simplify the process for traditional equity market investors by allowing them to invest using existing accounts, thereby reducing the technical challenges and operational risks involved in managing wallets and keys on their own.
Addressing the limitations of existing market products like Bitcoin futures-based ETFs traded on the CME, the Harvest Bitcoin Spot ETF and Harvest Ether Spot ETF leverage BOCI-Prudential Trustee Limited and the first SFC-licensed digital asset platform, OSL Digital Securities Limited. This partnership effectively mitigates challenges such as excessive margin requirements, the absence of short selling which can lead to price premiums, and rollover costs, thus more accurately reflecting the real-time value of Bitcoin and Ether.
Han Tongli, CEO and CIO of HGI, commented on the authorization, “This authorization not only reflects Hong Kong’s institutional advantages as an international financial center but also demonstrates the region’s foresight in financial and technological innovation. The official launch of the Harvest Bitcoin Spot ETF and Harvest Ether Spot ETF enables HGI to offer a comprehensive management solution for digital assets. This not only meets the demand for high-growth assets but also allows investors direct participation in the rapidly evolving blockchain and digital asset opportunities, providing yet another key to entering the future AI-driven tech world.”
“Through this product expansion, HGI aims to further lower the barriers to entry into the digital asset market, effectively address regulatory and custodial challenges, and promote the circulation, popularization, and investment security of cryptographic assets. These measures are expected to enhance the overall financial ecosystem, improving its transparency and efficiency, thereby bolstering investor confidence.”
Established in 2008, HGI is among the pioneering Chinese asset management firms to establish branches abroad. As a frontier outpost for HGI’s international investments, it has deeply cultivated the Chinese and Asian markets with a global outlook. In 2023, HGI successfully launched Hong Kong’s first tokenized fund, becoming the first Chinese financial institution in Hong Kong to introduce a fixed-income tokenized fund with a tokenization arrangement. The authorization of the Harvest Bitcoin Spot ETF and Harvest Ether Spot ETF not only consolidates HGI’s position as a pioneer in the asset management field but also bridges traditional finance with the burgeoning digital asset sector. The upcoming issuance, managed by HGI, Harvest Fund’s Hong Kong subsidiary, with the technical solution provided by Meta Lab Digital Assets Limited, empowers HGI in the innovative development of digital assets. This initiative not only diversifies and enriches investor portfolios in the digital era but also cements HGI’s role as a leader in financial innovation, poised at the frontier of traditional and digital asset integration.
IMPORTANT: Investment involves risks, including possible loss of principal amount invested. Past performance or any prediction or forecast is not indicative of future results. Investors should read the offering documents of Harvest Bitcoin Spot ETF and Harvest Ether Spot ETF (collectively the “Sub-Funds”) for further details, including the risk factors, before investing. Investors should not base investment decisions on this material alone. Investors should note:
- The Products: The Sub-Funds are passively managed exchange traded funds which directly hold bitcoin and ether respectively.
- Risks relating to bitcoin/ether: The Sub-Funds are exposed to the risks of bitcoin and ether respectively through their respective investments in bitcoin and ether directly, and the risks which adversely affect the price of bitcoin/ether may also affect the value of the Sub-Funds.
- Bitcoin/ether and bitcoin/ether industry risk: Bitcoin/ether operates without central authority and is not backed by any government. Bitcoin and ether are relatively new innovations and the markets for bitcoin and ether are subject to rapid price swings, changes and uncertainty.
- Speculative nature risk: Investing in bitcoin/ether is highly speculative, and market movements are difficult to predict.
- Extremely high volatility risk: An investment in bitcoin/ether can be highly volatile compared to investments in traditional securities and an investment in the Sub-Funds may experience sudden and substantial losses. Investors should be prepared to lose the full principal value of their investment within a single day.
- Fraud, market manipulation and security failure risk: Bitcoin/ether may be subject to the risk of fraud, theft, manipulation or security failures, operational or other problems that impact virtual asset’s trading platforms. The occurrence of any of the above may have negative impact on the price of bitcoin/ether and the value of the Sub-Funds’ investments.
- Cybersecurity risks: Bitcoin/ether is susceptible to theft, loss and destruction. Bitcoin/ether transactions are typically not reversible without the consent and active participation of the recipient of the transaction. The Bitcoin/Ethereum Network is also vulnerable to various deliberate cybersecurity attacks. Cybersecurity risks of the bitcoin/Ethereum protocol and of entities that custody or facilitate the transfers or trading of bitcoin/ether could result in a decline in the value of bitcoin/ether.
- Regulatory risk: The regulation of bitcoin/ether, virtual assets and related products and services continues to evolve. Regulatory changes and actions with respect to virtual assets generally or any single virtual asset in particular may alter, perhaps to a materially adverse extent, the nature of an investment in the bitcoin/ether.
- Fork risk: Developers may propose modifications to the Bitcoin/Ethereum Network from time to time. If the updated Bitcoin/Ethereum Network is not compatible with the original bitcoin/Ethereum software and a sufficient number (but not necessarily a majority) of users and miners elect not to migrate to the updated Bitcoin/Ethereum Network, this would result in a “hard fork” of the Bitcoin/Ethereum Network, resulting in the existence of two versions of Bitcoin/Ethereum Network running in parallel and a split of the blockchain underlying the Bitcoin/Ethereum Network. The occurrence of such “fork” may result in an adverse impact on the price and liquidity of bitcoin/ether and the value of the Sub-Funds’ investments.
- Virtual asset’s trading platform risk: Virtual asset’s trading platforms have in the past, and may in the future, collapse, stop operating or temporarily or permanently shut down due to fraud, cybersecurity issues, manipulation, security breaches. The potential consequences of failures of virtual asset’s trading platforms could adversely affect the value of bitcoin/ether and in turn the value of the Sub-Funds.
- Cybersecurity risk in relation to the custody of virtual assets: The security procedures in place for the custody of virtual assets may not be able to protect against all errors, software flaws or other vulnerabilities in the Sub-Funds’ technical infrastructure, which could result in theft, loss or damage of the Sub-Funds’ assets.
Index disclaimer: CF Benchmarks Ltd index data is used under license as a source of information for certain Harvest Global Investments Limited’s (“HGI”) products. CF Benchmarks Ltd, its licensors and agents have no other connection to HGI’s products and services and do not sponsor, endorse, recommend or promote any HGI’s products or services. CF Benchmarks Ltd, its licensors and agents have no obligation or liability in connection with HGI’s products and services. CF Benchmarks Ltd, its licensors and agents do not guarantee the accuracy and/or the completeness of any index licensed to HGI and shall not have any liability for any errors, omissions, or interruptions therein.
The Sub-Funds are authorized by the Securities and Futures Commission in Hong Kong (“SFC”). Such authorizations do not imply official recommendation by the SFC.
This material is published by HGI and has not been reviewed by the SFC.
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