Samsung Fund Unit Considers More Hong Kong Crypto Products After ETF

Joanna Ossinger, Bloomberg News

The Bitcoin logo on a screen in Hong Kong, China, on Wednesday, Dec. 21, 2022. Cryptocurrencies have had a harsh 2022 after reaching record highs late last year, buffeted by everything from the Fed's policy tightening to the implosions of the Terra/Luna ecosystem, hedge funds Three Arrows Capital and exchange FTX. Photographer: Paul Yeung/Bloomberg , Bloomberg

(Bloomberg) -- Samsung Asset Management indicated the firm could consider starting a spot Bitcoin exchange-traded fund in Hong Kong if the city allows such products under a push to become an Asia-Pacific center for crypto.

The company is launching the futures-based Samsung Bitcoin Futures Active ETF in Hong Kong on Friday and is monitoring the territory’s changing rule book for digital assets in case a path opens up to a product investing directly in coins.

“It really depends on how policy is going to be developed,” Sam Park, Hong Kong chief executive for Samsung Asset Management, said in an interview. The local administration is “clearly” keen on developing a crypto hub, he said.

Hong Kong is pursuing a plan laid out last year to attract crypto business, initially via legalized retail trading and digital-asset ETFs that invest only in futures traded on the CME Group Inc. platform. The city has signaled the crisis sparked by the collapse of the FTX exchange shows the need for a regulatory environment offering transparency, compliance and investor protection.

“Hong Kong is well positioned to become Asia’s crypto gateway,” said Rebecca Sin, an ETF analyst at Bloomberg Intelligence. She expects spot Bitcoin and Ether products to be allowed there by the end of 2023.

CSOP Asset Management Ltd. last month started a pair of Hong Kong ETFs investing in Bitcoin and Ether futures, which now have combined assets of about $82 million. Sin said total assets under management in Hong Kong ETFs stand at about $48 billion and will surpass $50 billion by year-end.

Crypto exchange-traded products rocketed in popularity during 2021’s boom in token prices. But demand withered last year as digital assets tumbled into a rout and crypto firms including FTX blew up.

Assets in crypto exchange-traded products globally have sunk to $21 billion from a peak of about $78 billion in 2021, Bloomberg Intelligence data show. North American products account for over 80% of funds under management.

--With assistance from John Cheng.