Hong Kong has officially cleared the way for six crypto-based spot ETFs to begin trading on April 30, according to Bloomberg analysts.

Initially, three spot bitcoin and three spot ether exchange-traded funds will become available, allowing investors to wager on the price of the two dominant cryptocurrencies without having to buy them directly. Earlier this month, Hong Kong approved several spot bitcoin ETFs and spot ether ETFs managed by China Asset Management, Harvest Global, Bosera and HashKey.

China Asset Management is the largest of the three issuers with more than $55 billion in assets under management in mainland China, $3.6 billion in Hong Kong and total of nearly 100 ETFs across both regions, according to an online presentation shared by Bloomberg analysts during an online discussion regarding Hong Kong's new ETFs.

Although Hong Kong's spot crypto ETFs are expected to attract much less capital when compared to those in the U.S. offered by financial heavyweights like BlackRock and Fidelity, the approval is a positive development. Hong Kong appears to be positioning itself as a digital-assets hub.

Hong Kongs seeks to differentiate

Unlike in the U.S., where the spot bitcoin ETFs that are trading are classified as "cash-only," in Hong Kong they newly listed funds will be of the "in-kind" variety. "The key disadvantage of only allowing cash creations is that the process has more steps than the in-kind model, this added complexity can increase costs for investors," according to BitMEX research.

Rebecca Sin, also an ETF analyst at Bloomberg said during Wednesday's discussion that Hong Kong's regulator decided to offer in-kind created funds, in part, as a way of differentiating from the spot bitcoin ETFs being offered in the U.S. market. "This now caters to a different group of people," said Sin. "Everyone that's holding bitcoin and ether can potentially now swap this into an ETF."

Smaller market but significant development

During Wednesday's discussion, Bloomberg ETF analysts predicted that the Hong Kong spot crypto exchange-traded funds will cumulatively bring in about $1 billion in assets under management within the first year or two.

That estimate differed significantly from an earlier prediction. A little more than a week ago, Bloomberg Senior ETF Analyst Eric Balchunas said he expected the Hong Kong spot bitcoin and ether ETFs would attract a modest $500 million in cumulative assets under management.

Mainland Chinese investors not being able to invest certainly could impact how much capital flows into  Hong Kong's spot crypto ETFs, as they are prohibited from investing in such products. "The Chinese government has banned crypto-related trades," said Jack Wang, another one of the Bloomberg analysts participating in Wednesday's discussion.