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Crypto: Hong Kong launches Asia’s first Bitcoin and Ether spot ETFs: Tech: Tech Times
From John LopezTech Times April 30, 2024 11:46am EDT
Hong Kong recently launched Asia’s first spot bitcoin and ether exchange traded funds (via AP).
Introduced by three renowned managers – Bosera Funds, China Asset Management (Hong Kong) Limited and Harvest Global Investments – these ETFs are now available for trading on the Hong Kong Stock Exchange.
(Photo: Jack Taylor/Getty Images)
Asia’s first spot bitcoin and ether ETFs from reputable managers debut in Hong Kong, marking a significant milestone in virtual asset investing in the region.
Hong Kong launches Bitcoin and Ether Spot ETFs, paving the way for virtual asset investing in Asia
On the day of the debut, the ETFs attracted attention, with an average price increase of nearly 1.7% for bitcoin ETFs and a slight decline of about 0.5% for ether ETFs at the close of trading.
These ETFs can be traded in both Hong Kong dollars and US dollars, with China Asset Management (Hong Kong) Limited also facilitating trading in Chinese yuan.
Joseph Chan, the city’s undersecretary for financial services, told the audience at the bell ringing ceremony that the move reflects Hong Kong’s pioneering status in developing virtual assets in the Asian market.
The introduction of bitcoin and ether spot ETFs in Hong Kong represents a significant advancement in the city’s bid to become a regional virtual asset investment hub.
It arrives just three months later United States Approved ETFs tied to the spot price of bitcoin, making it more accessible for traditional investors to include cryptocurrencies in their portfolios.
Speaking to the Hong Kong press, Han Tongli, CEO of Harvest Global, highlighted the advantage of in-kind trading offered in Hong Kong over the US, allowing investors to use bitcoin and ether directly for ETF investments.
This distinguishes Hong Kong as an international financial center and gives the city the opportunity to compete with large fund management firms in the United States.
Hong Kong cryptocurrency ETFs show promise despite slow start
Despite the initial positive movements, fluctuations in the performance of the ETFs have been recorded since the launch. However, industry experts believe that while Hong Kong ETFs may not attract the same level of inflows as those in the United States, they could encourage other nations to approve cryptocurrency ETFs and promote broader adoption of digital assets.
According to data from CCData, there is optimism regarding the future growth of these ETFs in Hong Kong. However, some predict a slow initial recovery due to investor caution. It may take some time for the market size of these ETFs in Hong Kong to catch up to that of their US counterparts.
CoinDesk tells us that the combined trading volume of the six ETFs on their debut day was just $11 million, significantly lower than the expected $100 million. Bitcoin ETFs contributed $8.5 million to this tally, while Ether ETFs contributed the remaining amount. This volume is also much lower than US-based BTC spot ETFs, which posted a first-day tally of $655 million.
Spot ETFs offer investors exposure to cryptocurrencies without the need to own them directly, making them an attractive option in the digital asset space. They are considered superior to futures-based ETFs because they avoid rollover costs.
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