Samsung Asset Management, the investment arm of the South Korean conglomerate, will list its Bitcoin Futures Exchange Traded Fund (ETFs) on the Hong Kong Stock Exchange. The move comes after Hong Kong's SFC said it would allow ETF providers to list futures contracts on the stock exchange last year. Hong Kong is the only location in Asia that allows BTC ETFs to be listed on traditional market exchanges rather than on just cryptocurrency exchanges. Samsung's decision is fuelled by the rise in engagement with digital assets from Asian investors, both individual and institutional.
The ETF is set to track Bitcoin's spot prices for which, investments in Bitcoin futures products that are already listed on the Chicago Mercantile Exchange (CME).
“The Sub-Fund seeks to provide economic exposure to the value of Bitcoin by investing predominately in front-month Bitcoin Futures on CME. The Sub-Fund does not invest directly in Bitcoin and will not receive any Bitcoin from Bitcoin Futures on CME,” Samsung Asset Management stated.
ETFs are a type of price-tracking trading contract entered into by two parties. Both the parties agree to purchase or sell assets at a predefined price at a later date.
When the smart contract ends, the price of the underlying asset of the ETF – more or less – cannot influence this contract and one party ends up making a profit, a report by CoinDesk had explained previously.
The aim of Samung's decision is to expose the masses to Bitcoin and its usage as an investment and fintech tool.
As the time of writing, Bitcoin's value stood at $18,200 (roughly Rs. 14.8 lakh).
The first Bitcoin futures ETF was launched at the New York Stock Exchange on October 19, 2021.
The development is an indicator of Samsung's inclination to explore the potential of the crypto sector.
Meanwhile, this is not the first Web3-friendly initiative for the South Korean conglomerate.
In August last year, reports claimed that it could launch its own crypto exchange this year in 2023.
In June 2022, Samsung also moved its Bitcoin mining chips into the trial production stage. There 3nm chips are reportedly around 23 percent to 45 percent more efficient than the chips manufactured on previous nodes.
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