May 22, 2024
Hong Kong's Spot Bitcoin ETF Debut Struggles
Bitcoin ETF

Hong Kong’s Spot Bitcoin ETF Debut Struggles

The debut of spot Bitcoin ETF exchange-traded funds (ETFs) in the United States has established a daunting standard for Hong Kong, with its new Bitcoin and Ethereum ETFs facing difficulty in reaching comparable initial trading volumes. Despite the anticipation surrounding the launch, spot Bitcoin (BTC) and Ether (ETH) ETFs in Hong Kong faced subdued trading activity.

Challenges in Matching US Trading Volumes

Bitcoin saw a decline to $61,031, while Ether dipped to $3,005 as the Hong Kong market welcomed its new ETFs. However, the total trading volume of six new crypto ETFs on their debut in Hong Kong amounted to 87.58 million Hong Kong dollars ($12 million), significantly lower than the staggering $4.6 billion recorded by US spot Bitcoin ETFs on their first day.

First-day trading of Bitcoin and Ethereum spot ETFs on the Hong Kong Stock Exchange. Source: HKEX

Performance of Hong Kong’s ETFs

The performance of the six spot Bitcoin and Ether ETFs in Hong Kong, managed by prominent firms such as China Asset Management, Harvest Global, Bosera, and HashKey, was relatively modest. The Bosera HashKey Bitcoin ETF and Bosera HashKey Ether ETF recorded 249,000 HK$ and 99,000 HK$ in trading volume, respectively, at the close of the trading day. On the other hand, the China Asset Management (CAM) Bitcoin and Ether ETFs displayed more promising figures, with the former garnering 4.6 million HK$ and the latter attracting the same amount of trading volume.

Investor Interest and Market Hype

Before trading, CAM’s spot Bitcoin ETF and spot Ethereum ETFs drew significant attention, with subscriptions amounting to $140 million during the initial offering period. The Hong Kong Stock Exchange (HKEX) had previously noted investor enthusiasm for cryptocurrency futures ETFs, launched in late 2022. These “VA Futures ETFs” accumulated $529 million in net inflows in the first quarter of 2024, further contributing to the anticipation surrounding the spot BTC and ETH ETFs’ launch on April 30.

Image by qalebstudio on Freepik

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