The well-known Hong Kong-based investing company Victory Securities recently revealed its fee schedule for the recently authorised cryptocurrency exchange-traded funds (ETFs) for Ethereum and Bitcoin.

This disclosure comes before the Hong Kong Securities and Futures Commission (SFC) formally releases a list of ETF issuers that have been approved.

Victory Securities wants to present its cryptocurrency products in an appealing way to attract potential investors as the local market becomes more accessible to them.

Pricing Strategies That Are Dynamic in Primary and Secondary Markets

Victory Securities will charge investors a fee ranging from 0.5% to 1% for the primary market, which entails direct investing in the ETFs, with a minimum cost of $850.

The SFC has not yet officially approved this pricing system, which is anticipated to promote an open and regulated surroundings for these financial goods.

Furthermore, the secondary market costs for trading existing ETF shares are 0.15% for trades made online and 0.25% for trades made over the phone.

These rates are intended to be competitive with those that recently announced comparable Bitcoin ETFs from U.S. asset managers.

Franklin Templeton, for example, charges a cost of 0.19%, whereas other U.S. ETFs range from 0.20% to 0.90%.

The Grayscale Bitcoin Trust (GBTC) continues to charge a higher 1.5% fee in spite of these competitive rates, which has an effect on the fund's success in the market.

International Views and Regional Response

Reactions to the announcement have been conflicting.

Although a lot of neighbourhood exchanges and cryptocurrency aficionados have embraced these advancements, doubts about the ETFs’ potential success in Hong Kong.

Notably, Eric Balchunas, a Bloomberg ETF analyst, expressed concerns about Chinese investors’ accessibility given the existing prohibitions on cryptocurrency acquisitions.

Points to Consider

▪️Competitive primary market transaction fees imply Victory Securities is strategically positioned itself to draw in first investors.

▪️Because secondary market transaction fees are less than those for primary market transactions, investors may trade more frequently.

▪️The strategy is to harmonise with worldwide norms in order to make Hong Kong a competitive market for crypto ETFs, as evidenced by comparisons with U.S. ETF cost structures.

▪️The true effect of these ETFs on the Hong Kong financial market is yet unknown as the regulatory framework is still being developed. Nonetheless, Victory Securities is positioned as a progressive participant in this changing market environment because to their early fee announcement.