May 7, 2024
By Sharan Kaur Phillora
Recent reports have surfaced indicating that Hong Kong’s newly introduced Bitcoin Exchange-Traded Funds (ETFs) have experienced notably low trading volumes during their initial days. Despite the city’s ambitions to establish itself as a crypto hub, these ETFs have failed to entice investors and traders, especially in the wake of declining Bitcoin prices
Here’s what we know:
Hong Kong’s foray into the ETF realm began on April 30 with the launch of Bitcoin and Ether ETFs, following the approval from the Securities and Futures Commission (SFC). A total of six ETFs were introduced by asset managers including China Asset Management, Harvest Global, Bosera, and HashKey.
Prior to the launch, ChinaAMC executive Zhu Haokang expressed confidence in an interview with Coin Edition, anticipating that Hong Kong’s ETFs would surpass the initial trading volumes of their US counterparts. However, the reality fell short of expectations. On the first day, the combined trading volume amounted to 87.58 million Hong Kong Dollars (equivalent to $12 million USD), a stark contrast to the impressive $4.6 billion USD recorded by US spot Bitcoin ETFs on their debut day. Despite this, Bloomberg’s ETF analyst Eric Balchunas suggested that Hong Kong’s smaller crypto market should be taken into account when assessing these volumes.
Subsequently, trading volumes continued to dwindle, with Friday seeing Bitcoin ETFs trade at a mere $5.5 million USD. The prevailing bear market, coupled with Bitcoin’s price decline of nearly ten percent in the past month, poses significant challenges to the success of Hong Kong’s ETFs. Presently, Bitcoin is trading at $63,331 USD, showing a slight increase of 0.15% in the last day. However, its value had dipped to $56,000 USD at the beginning of May. Over the past week, Bitcoin has witnessed a decline of 0.96% and a more substantial dip of 5.33% over the past month.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.
