On Tuesday, the Hong Kong Exchange listed six new ETFs that are based on Bitcoin and Ethereum products. This move allows investors to gain exposure to cryptocurrencies without having to purchase and store the virtual currencies themselves. It is seen as a significant step towards the acceptance of cryptocurrencies by international financial markets and regulatory authorities. These ETFs had a total value of $11.2 million and a trading volume of over HK$87.5 million at the time of their debut. This provides investors with a new entry point to the CFD market through traditional financial channels.
Managed by China Asset Management (HK) Ltd, Harvest Global Investment, Bosera Asset Management, and HashKey Digital Asset Group, these ETFs offer direct investment in Bitcoin and Ethereum. The China Asset Management Bitcoin ETF had the highest trading volume, reaching HK$37.16 million. During the same period, the equivalent value of Ether in Hong Kong dollars closed at HK$12.66 million, with a similar trading volume. These financial products provide participants with a legal option to combine the benefits of cryptocurrencies with regulatory oversight.
In the United States, the launch of similar ETFs saw significant demand, with 11 Bitcoin ETFs reaching a trading volume of over $4.6 billion in a single day in January. Although the volume in Hong Kong was smaller, it still demonstrated a corresponding demand. This difference can be attributed to the varying market dynamics and investor bases in the two regions.
On the first trading day, the China Asset Management Bitcoin ETF had a market capitalization of $121.7 million. It is a relatively new ETF, and its Ether ETF raised $20.4 million in assets under management. These numbers instill trust in the investor relationship within the region, despite the short time since their launch.
Other players in the new crypto market segment, such as Harvest Global, also experienced success with their Bitcoin ETF, generating HK$17.89 million in trading volume. Their Ether ETF had a trading volume of HK$4.95 million. The Bitcoin ETF and Ether ETF proposed by Bosera HashKey have also garnered attention, with trading volumes of HK$12.44 million and HK$2.48 million, respectively. These figures highlight the diverse demand from stock market investors based on their investment styles.
The lack of staking rewards in Hong Kong’s crypto ETFs has been noted as an area of improvement. Ether ETFs typically offer around a 4% annual percentage rate in staking rewards, which could affect long-term investors. Fund issuers are engaging with regulators to address these risks and benefits.
Justin d’Anethan, APAC Business Development head at crypto market maker Keyrock, commented on the market after the ETF launch. He mentioned that pre-listing trading volumes might be lower compared to US stock markets but still indicate growing acceptance of these financial products among Hong Kong investors. This reception is particularly significant as many market participants are investors from mainland China.