Originally published on: August 24, 2024
Hong Kong’s spotlight is shining bright on Bitcoin exchange-traded funds (ETFs) as they surpass a milestone of 2 billion Hong Kong dollars, equivalent to over $256 million in assets under management (AUM).
Rapid Growth of Hong Kong Bitcoin ETFs
The journey for Hong Kong’s Bitcoin ETFs may have started slowly in comparison to their United States counterparts, but they are quickly gaining momentum. Recent data from SoSo Value reveals that the three spot BTC ETFs in Hong Kong recorded a substantial net inflow of approximately 247 BTC within the last week alone. This influx has boosted their total holdings to around 4,450 BTC, elevating the combined AUM for these ETFs to approximately HK$2.1 billion, which translates to around $269 million.
Key Players in the Hong Kong ETF Market
Driving this surge in AUM are ETFs managed by China Asset Management and Harvest Asset Management in collaboration with the reputable digital asset trading platform OSL. These ETFs have garnered more than HK$1.3 billion ($167 million) in AUM. The remaining spot Bitcoin ETF, operating independently from OSL, holds around HK$776 million ($99.5 million), claiming a significant 42% market share.
Challenges and Opportunities for Hong Kong Bitcoin ETFs
While Hong Kong investors may have a limited selection of BTC exposure options in comparison to the US market, the recent inflows signal potential for further growth. Despite this, Hong Kong’s spot Bitcoin ETFs are trailing their US counterparts in performance. The initial week of the ETFs’ launch in April saw inflows of $262 million, with a modest actual asset influx of $14 million. This stark difference underscores the hurdles Hong Kong faces in establishing itself as a global hotspot for cryptocurrency investments.
Bright Future Ahead for Hong Kong ETFs
Bloomberg ETF analyst Rebecca Sin points out that Hong Kong’s in-kind ETF creation model offers a distinctive opportunity to expand AUM and trading volume. However, the city is still playing catch-up to the US market in terms of investor interest and capital inflows.
With Bitcoin ETFs making waves in Hong Kong, the spotlight is firmly fixed on this region as a potential powerhouse in the ever-evolving cryptocurrency investment landscape.
