Six new exchange-traded funds (ETFs) based on Bitcoin and Ethereum products were recently listed on the Hong Kong Exchange, marking a significant milestone in the acceptance of cryptocurrencies by the global financial market and regulatory authorities. These ETFs, managed by China Asset Management (HK) Ltd, Harvest Global Investment, Bosera Asset Management, and HashKey Digital Asset Group, provide investors with a way to invest in Bitcoin and Ethereum without the need to purchase and store the actual virtual currencies.
During their debut, these ETFs generated a trading volume of over HK$87.5 million (approximately $11.2 million). This successful start opens up new opportunities for investors to access the CFD market through traditional financial markets.
Among the ETFs, the China Asset Management Bitcoin ETF had the highest trading volume, reaching HK$37.16 million. The Ether ETFs also performed well, with a trading volume of HK$12.66 million. These figures demonstrate the legal option that participants now have to combine the benefits of cryptocurrencies with regulatory oversight.
Interestingly, when similar ETFs were launched in the United States, they experienced a surge in volume, reaching over $4.6 billion in one day in January. Although the trading volume in Hong Kong was smaller, it still indicated a significant demand for these products. The differences in market dynamics and investor bases contribute to the varying levels of success in different markets.
The China Asset Management Bitcoin ETF, in particular, had a market capitalization of $121.7 million at the end of the trading session, instilling trust and confidence among investors in the region. Harvest Global also saw success with their Bitcoin and Ether ETFs, with trading volumes of HK$17.89 million and HK$4.95 million, respectively. Bosera HashKey’s Bitcoin and Ether ETFs attracted volumes of HK$12.44 million and HK$2.48 million, highlighting the unique demand from stock market investors with different investment styles.
Despite the positive response to the launch of these crypto ETFs, it also revealed the need for regulatory measures and market expansion. The lack of staking rewards in Ether ETFs, which typically offer a 4% annual percentage rate, could impact long-term investors. Fund issuers are engaging regulators to address potential risks and benefits associated with these products.
Livio Weng, CEO of HashKey Exchange, and other industry figures are in discussions with regulators to introduce staking rewards for ETF investors. This mechanism could attract more investors by providing them with returns on their investments.
Justin d’Anethan, APAC Business Development head at Keyrock, a crypto market maker, commented on the market’s performance after the ETF launch. He noted that pre-listing trading volumes may have declined compared to US stock markets, but they still indicate growing acceptance among Hong Kong investors. This acceptance is particularly noteworthy considering that most market participants are investors from mainland China.
