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Hong Kong Launches First Batch of Cryptocurrency ETFs
Issuers in Hong Kong are expecting approximately $300 million in combined first-day inflows for the six new Hong Kong spot-crypto ETFs, with a preference for Bitcoin funds. This marks potential competition for popular Bitcoin products in the United States.
Details of the ETF Launch
Harvest Global Investments Ltd., along with a partnership between HashKey Capital Ltd. and Bosera Asset Management (International) Co., listed Bitcoin and Ether ETFs in the city on Tuesday. In comparison, spot Bitcoin ETFs from issuers like BlackRock Inc. and Fidelity Investments in the US have accumulated a historic $52 billion in assets so far.
Potential Inflows and Market Outlook
Bloomberg Intelligence’s Rebecca Sin estimates that Bitcoin and Ether funds in Hong Kong could amass around $1 billion over the next two years. Han Tongli, the CEO of Harvest Global, believes that this estimate is too conservative, citing the acceptance of financial products and services in Hong Kong by investors in both the West and the East.
Unique Features of Hong Kong ETFs
The adoption of an in-kind ETF subscription and redemption mechanism sets Hong Kong apart, allowing for the exchange of underlying assets for fund units and vice versa. This approach enhances the appeal of Hong Kong’s products and could result in the eventual uptake of the ETFs being three times larger than that of the US funds.
Challenges and Opportunities
Despite potential challenges due to Hong Kong’s smaller financial sector, local products are appealing due to easy access, particularly during Asian trading hours. Bosera Asset Management (International)’s Head of Products, Ethan Li, expressed confidence in the appeal of the Hong Kong ETFs and mentioned the company’s plans to expand its team and digital-asset product pipeline.
Market Trends and Price Analysis
While digital assets have experienced a significant rebound since the market collapse in 2022, the recent revival has stalled. Bitcoin’s price currently sits at around $63,540, approximately $10,000 below its record high in March.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
