Categories: Global Adoption

Asia’s First Spot Bitcoin and Ethereum ETFs Make Lukewarm Hong Kong Debut

Six spot bitcoin and ether exchange traded funds (ETFs) finished mixed in their Hong Kong debut on Tuesday amid relatively lukewarm trading, as the city tests Asian investors’ enthusiasm for cryptocy assets.
The debuts mark the first launch of spot cryptocy ETFs in Asia and come just three months after the U.S. launched its first ETFs to track spot bitcoin. Cryptocy is banned in mainland China, but Hong Kong has been promoting itself as a global digital asset hub, part of a drive to maintain its allure as a financial center.
Spot bitcoin ETFs launched by China AMC , Harvest and Bosera gained between 1.5% and 1.8% at the close. The three ether ETFs , , managed by the asset managers edged down. Bitcoin dropped more than 1%. The first-day total turnover of the six ETFs was about $112 million, far below the $4.6 billion recorded in the first day of U.S. trading.
Still, issuers said the funds raised before the official listing are sizable thanks to interests from both crypto and traditional investors.
China AMC said its bitcoin ETF launched with an initial size of HK$950 million ($121 million), the biggest among the three issuers.
Christina Choi, an executive director of the Securities and Futures Commission (SFC), hailed the product debut as a milestone in Hong Kong’s ETF market, but also flagged risks.
“Virtual assets are quite speculative and very volatile … so I remind you that such assets are not suitable for all investors,” Choi told Tuesday’s launch event.
The ETF launch also put Hong Kong in direct competition with the United States for crypto investors.
U.S. spot bitcoin ETFs have drawn roughly $12 billion in net inflows, contributing to a surge in bitcoin’s price earlier this year. But U.S. regulators have not yet approved ETFs that track spot ether prices. Local crypto giant HashKey Group expects the size of Hong Kong spot crypto ETF market could reach 20% of the U.S. counterpart in one year.
Han Tongli, CEO of Harvest Global Investments, said Hong Kong should have greater potential than the U.S. in developing the crypto assets as it can attract investors from both west and east.
In the long term, crypto ETFs have the potential to be available to mainland Chinese investors if the products are proved to be risk controllable, Han said.
Another difference with U.S. crypto ETFs is that Hong Kong’s adopt the so-called “in-kind” transaction mechanism that allows investors to buy and sell ETF shares using the relevant crypto tokens instead of cash.
Such an option should be appealing to investors as token owners “may consider the benefit of holding through the ETFs without the cost of first converting to fiat (cy)”, said Robert Zhan, risk consulting director at KPMG China.
Terron Gold

Share
Published by
Terron Gold
Tags: BitcoinBitcoin ETFEthereum ETFEtherumHong Kong
2 years ago

Recent Posts

Candy Digital Announces Migration to Solana as NFT Platform Repositions for Long Term Growth

NFT platform Candy Digital has announced plans to migrate its digital collectibles ecosystem to the Solana blockchain, signaling…

7 hours ago

US Military Runs Bitcoin Node for National Security Testing, Admiral Tells Congress

The U.S. military has confirmed it is actively running a Bitcoin node as part of national security research, while…

7 hours ago

Over 90% of Web3 Games Failed After $15 Billion Boom as Players Never Showed Up

The Web3 gaming sector is facing a harsh reality check as new data reveals that more…

8 hours ago

Justin Sun Sues Trump Linked World Liberty Financial Over Frozen Crypto Assets

Justin Sun, founder of TRON, has filed a federal lawsuit against World Liberty Financial, a crypto venture…

10 hours ago

Tether Freezes $344 Million in USDT on Tron After Wallets Flagged by U.S. Authorities

Tether has frozen approximately $344 million in USDT on the Tron blockchain after the wallets were flagged by U.S. authorities, marking…

11 hours ago

Kalshi Fines and Suspends Three Congressional Candidates for Betting on Their Own Elections

Prediction market platform Kalshi has fined and suspended three U.S. congressional candidates after determining they engaged in “political…

12 hours ago