Hong Kong Introduces Asia's First Bitcoin and Ethereum Spot ETFs


Hong Kong made history by introducing six new exchange-traded funds (ETFs) for Bitcoin and Ethereum, marking a significant development in the Asian cryptocurrency market. These ETFs, launched by China Asset Management (ChinaAMC), Bosera Asset Management, and Harvest Global Investments, provide an avenue for mainstream investors to include Bitcoin and Ethereum in their portfolios without the need to directly purchase the digital assets.

According to information from the Hong Kong Stock Exchange (HKEX), the six ETFs amassed a total trading volume of HK$49.4 million (US$6.3 million) during the initial morning session of their debut trading day. ChinaAMC's Bitcoin ETF took the lead with HK$22.97 million in turnover, while its Ether ETF followed closely behind with HK$10.47 million.

When spot bitcoin ETFs began trading in the U.S. in January, their daily turnover reached $4.6 billion on the first trading day. In comparison, ChinaAMC said that its subscription size during the initial offering period amounted to HK$1.1 billion (US$140.5 million), with HK$950 million for its Bitcoin product and HK$160 million for the ether ETF, reports stated.

Hong Kong's authorization of Ethereum ETFs distinguishes it from the United States, where the Securities and Exchange Commission (SEC) has not yet granted approval, citing ongoing uncertainties regarding Ethereum's classification as a security.

It’s still early days for Hong Kong’s newest ETFs and experts claim the growth potential is significant. Harvest Global Investments CEO Tongli Han told CNBC, “The market potential is double the size of that of our U.S. counterparts”, adding he expects slow growth initially as many Asian investors prefer to watch from the sidelines before investing.

Meanwhile, there was a substantial decline in Bitcoin prices, dropping from above $68,000 to $61,900 within a 24-hour period, marking a 9% decrease and the most significant downturn since the collapse of the FTX exchange in November 2022. Contributing to this price drop are outflows from spot ETFs that track Bitcoin, with spot ETFs experiencing a record net outflow of $326 million.

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