Hong Kong has recently launched Asia's first spot bitcoin and ether exchange-traded funds (ETFs) (via AP).
Introduced by three reputable 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.
Hong Kong debuts Asia's first spot bitcoin and ether ETFs by reputable managers, marking a significant milestone in virtual asset investment in the region.
Hong Kong Launches Spot Bitcoin and Ether ETFs, Pioneering Virtual Asset Investment in Asia
On the debut day, the ETFs garnered attention, with an average price increase of nearly 1.7 percent for bitcoin ETFs and a slight decline of about 0.5 percent for ether ETFs by the close of trade.
These ETFs can be traded in both Hong Kong 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 public at the bell tolling ceremony that this move reflects Hong Kong's pioneering status in virtual asset development in the Asian market.
The introduction of spot bitcoin and ether ETFs in Hong Kong signifies a significant advancement in the city's bid to become a regional virtual asset investment hub.
It comes just three months after the United States approved ETFs tied to bitcoin's spot price, making it more accessible for mainstream investors to include cryptocurrencies in their portfolios.
Speaking with the Hong Kong press, Han Tongli, CEO of Harvest Global, stressed the advantage of in-kind trading offered in Hong Kong over the United States, allowing investors to use bitcoin and ether directly for ETF investments.
This feature sets Hong Kong apart as an international financial hub and presents an opportunity for the city to compete with large fund management companies in the US.
Hong Kong's Cryptocurrency ETFs Show Promise Despite Slow Start
Despite the initial positive movements, there were fluctuations in the performance of the ETFs post-launch. However, industry experts believe that while the 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 wider adoption of digital assets.
According to data from CCData, there is optimism surrounding the future growth of these ETFs in Hong Kong. However, some anticipate a slow initial uptake due to investor caution. The market size of these ETFs in Hong Kong may take time to match 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, with ether ETFs contributing the remaining amount. This volume is also much lower compared to the US-based spot BTC ETFs, which had 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 as they avoid rollover costs.
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