The ETF was designed by Samsung Asset Management Hong Kong (SAMHK), a subsidiary of Samsung Asset Management, to track the spot price of Bitcoin by investing in Bitcoin futures products listed on the Chicago Mercantile Exchange (CME). The ETF will primarily invest in CME Bitcoin Futures, with a minor allocation to CME Micro-Bitcoin Futures.
The ETF’s launch comes at a time when both government and institutional investors in Hong Kong are showing an increased interest in Bitcoin and other cryptocurrencies.
Hong Kong’s finance secretary, Paul Chan, recently stated at a Web3 forum that the region is still committed to being a cryptocurrency hub, and this was followed by the Financial Services and Treasury Bureau (FSTB), a Hong Kong regulator, stating that a new framework could allow retail investors to trade on licensed exchanges.
This ETF listing offers investors a new option to gain exposure to Bitcoin, perhaps attracting more mainstream investors to the cryptocurrency market. The ETF is particularly appealing to investors searching for a means to invest in Bitcoin without having to handle their private keys due to Samsung’s reputation and brand strength.
Some argue that futures ETFs are detrimental to the crypto industry because the ETF’s value is based on futures contracts rather than the underlying asset, leaving it vulnerable to manipulation by traders with significant stakes. Indeed, it may be argued that a futures ETF is best suited for shorting the asset and is not a good instrument for regular investors.
It might also be argued that Gary Gensler, Chairman of the US Securities and Exchange Commission, exclusively approves Bitcoin futures ETFs. Many Bitcoin ETFs have been rejected throughout the years, but futures ETFs have been approved. This does seem to go against one of Gensler’s core mandates, which is to safeguard individual investors.
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