Spot Bitcoin and Ethereum ETFs have finally launched in Hong Kong, two weeks after receiving approval from the Securities and Futures Commission (SFC). Unfortunately, these ETFs generated only $12 million in volume on their first day, 378 times less than the Bitcoin spot ETFs in the United States at their launch.

Spot Bitcoin and Ethereum ETFs launched in Hong Kong

Two weeks after their approval by the Securities and Futures Commission (SFC), the 6 spot Bitcoin and Ethereum ETFs are finally available on the Hong Kong stock exchange.

These 6 ETFs were launched by the Hong Kong subsidiaries of the 4 major Chinese asset managers:

• BOS HSK BTC and BOS HSK ETH are issued by HashKey Capital in collaboration with Bosera Asset Management
• CAM BTC and CAM ETH issued by ChinaAMC
• HGI BTC and HGI ETH issued by Harvest Global Investment

By approving these ETFs, Hong Kong has created a direct gateway for institutions from mainland Asia seeking to invest in Bitcoin and Ethereum, potentially sparking competition with the United States market.

Although the Hong Kong stock exchange has lower trading volumes compared to that of the United States, some believe that the launch of Hong Kong ETFs could outperform the performance of U.S. ETFs.

Hong Kong records 378 times less volume than the United States

Zhu Haokang, Head of Digital asset management and family wealth at ChinaAMC, reportedly stated that he expects a better start for Hong Kong ETFs compared to those in the United States.

“I am very confident, and I believe the initial scale of spot digital asset ETF listings in Hong Kong can exceed the first-day issuance scale in the United States.”

Zhu Haokang

Unfortunately, the first day of trading for Hong Kong’s spot Bitcoin and Ethereum ETFs ended with a volume of about $12 million, which is 378 times less than the launch of Bitcoin spot ETFs in the United States.

In fact, the American Bitcoin spot ETFs recorded a volume of $4.54 billion on the second day, even reaching nearly $10 billion by March 5, 2024.

Additionally, the market for cryptocurrency funds in the Asia-Pacific region represents about $244 million, while in North America, it amounts to $73 billion. This significant difference, coupled with the fact that Chinese investors cannot access Hong Kong ETFs, explains the low volumes seen today.

However, Hong Kong’s spot Bitcoin and Ethereum ETFs have two main advantages. First, the Hong Kong ETFs won’t experience the same outflows caused by Grayscale’s GBTC, a Bitcoin Trust transformed into a spot Bitcoin ETF, which has seen $10 billion in net outflows since January 2024.

Lastly, according to a study by Huobi, Asia is the continent with the most cryptocurrency users, boasting 130 million users compared to 50 million in North America.

Source : HKEX