Hong Kong’s Crypto ETFs Make a Mark in the Global Market

May 3, 2024

The official launch of spot Bitcoin and Ethereum exchange-traded funds (ETFs) in Hong Kong is one of the eagerly-awaited events in the cryptocurrency space following the historic BTC halving and the official rollout of Bitcoin spot ETFs in the U.S.

While some reports have offered bearish news about the region’s crypto ETF launch, a closer look at the figures reveals it was a huge success.

According to data provided by ChinaAMC, one of Hong Kong’s ETF issuers, as of the 4:10 p.m. market close on Tuesday, the ChinaAMC Bitcoin ETF recorded a volume of $5.3 million, while the ChinaAMC Ether ETF achieved a volume of $1.8 million, leading their respective categories. By the close of trading, the ChinaAMC Bitcoin ETF had amassed $121.7 million in assets under management, while the ChinaAMC Ether ETF secured $20.4 million in AUM, both of which are impressive figures.

image courtesy of @EricBalchunas

The launch of six spot Bitcoin and Ether ETFs in Hong Kong attracted a substantial $292 million on its inaugural day. These ETFs, issued by three different providers, have made a notable impact in the cryptocurrency sector. Of the total amount, approximately 15% was accounted for by Ether, indicating strong investor interest in both types of digital assets.

Earlier this week, Bloomberg ETF analyst Eric Balchunas cautioned the community to temper their expectations regarding the Hong Kong crypto ETFs. However, he emphasized that focusing on specific data points or numbers relevant to the Hong Kong market, rather than relying on broader or more generalized statistics, reveals that the launch was indeed remarkable, and stated it was “BIG.”

The ETF analyst highlighted the performance of Bitcoin and Ethereum ETFs by ChinaAMC as a key point, noting that it attracted an $123 million on its inaugural day. This achievement positions it as the sixth largest among 82 ETFs launched in the past three years in Hong Kong and within the top 20% overall.

When evaluating the performance of Hong Kong’s crypto ETFs, it’s essential to consider several key factors. Unlike their U.S. counterparts, these ETFs are primarily accessible to the city’s 7.5 million residents and select overseas traders due to capital restrictions.

Notably, residents of Mainland China, with a population exceeding 1.7 billion, are unable to access these crypto ETFs unless they possess prior Hong Kong residency. Moreover, Hong Kong residents have the option to access U.S. spot Bitcoin ETFs even before local crypto ETFs are approved, adding nuance to the assessment of their performance.

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