- Hong Kong's approval of the Spot Ethereum ETF could pave the way for more Layer 1 tokens to be accepted as ETFs.
- OKLINK, OKX's Hong Kong branch, noted that Hong Kong's appeal may have increased among crypto projects.
- Coinbase's recent institutional research report showed that the chances of the Spot Ethereum ETF being approved are 30 to 40%.
bitcoin and Ethereum Spot ETFs made their debut in Hong Kong on April 30. Following the approval, as ETH holders in the US await the Securities and Exchange Commission's decision on Ether spot ETF applications, Hong Kong is an attractive destination for crypto projects.
Ether ETF approval could open doors for more Layer 1 ETFs in Hong Kong
OKLINK, the Hong Kong entity of cryptocurrency exchange OKX, says that considering Hong Kong's approval of the Ether spot ETF, more Layer 1 tokens could find acceptance here. The exchange quotes Solana, one of Ethereum competitors as an example.
The acceptance of more Layer 1 chains as ETFs is expected to greatly increase the attractiveness of the Asian city for projects and investors.
Jason Jiang, researcher at Ouke Cloud Chain Research Institute was quoted in the OKX investigation and said:
The significance of Hong Kong's issuance of spot virtual asset ETFs is not that it can bring major changes to the market in the short term, but rather that it indicates that Hong Kong financial institutions will accelerate their adoption of virtual assets.
One of the main factors that makes Hong Kong ETFs more attractive is the physical redemption option. Native investors find this to be a lucrative option compared to US Ether spot ETFs.
The commission rate remains relatively high, resulting in a disadvantage and restricted flow of liquidity and funds into City ETFs. The report states that the recent drop in Bitcoin prices may be one of the factors affecting the low capital inflow into these assets.
