China Asset Management, Bosera Capital, and other applicants shared news on the social-media platform WeChat about their approvals, but some posts were later deleted, highlighting the premature nature of these announcements.

The Securities and Futures Commission (SFC) of Hong Kong, the city's markets regulator, has not yet officially confirmed these approvals, which has led to some confusion. The SFC stated that it issues conditional authorization letters to ETF applications if they generally satisfy its requirements, subject to various conditions. After receiving this conditional approval, applicants must seek listing approval from Hong Kong Exchanges and Clearing Ltd.

Amidst these developments, the crypto market reacted positively, with Bitcoin rising as much as 4.3% and Ether by 6.5%. Prices for Bitcoin and Ether stood at $66,232 and $3,253 respectively as of late afternoon in Hong Kong.

This move is part of Hong Kong’s strategy to establish itself as a digital-asset hub, competing with cities like Singapore and Dubai. Following the implementation of a dedicated regulatory regime last year, city officials are keen to restore Hong Kong’s image as a modern financial hub after its reputation was impacted by political crackdowns.

OSL Digital Securities Ltd. also confirmed its role in providing custodial services for the Bitcoin and Ether products from China Asset Management and Harvest, enhancing the operational framework for these ETFs.

The spotlight on spot-crypto ETFs has grown since similar funds debuted in the U.S. earlier this year, managed by heavyweights such as BlackRock Inc. and Fidelity Investments. These funds have attracted significant investment, with a net inflow of $12.5 billion to date, helping Bitcoin reach a record high of $73,798 in mid-March.

QCP Capital, a Singapore-based digital assets trading house, expressed optimism about the potential approval of these ETFs. They noted that these products would provide an Asia-based alternative for institutional investors, allowing for exposure outside of U.S. market hours, which could be bullish in the short term.

For those unfamiliar, a Bitcoin ETF allows investors to gain exposure to Bitcoin without the complexities of directly buying and managing the digital currency. These funds aim to track the price of Bitcoin and are traded on traditional market exchanges, making them accessible to a wider range of investors. The introduction of Bitcoin ETFs is expected to bring more liquidity and institutional investment into the cryptocurrency market, potentially stabilizing and increasing the price of Bitcoin over time.