Hong Kong has become the first financial hub in the world to launch spot Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs), with six new crypto ETFs debuting on April 30, 2024. The launch comes amidst ongoing regulatory uncertainty surrounding cryptocurrencies in the United States, where the Securities and Exchange Commission (SEC) is yet to approve any spot Bitcoin or Ethereum ETFs.
The Hong Kong Stock Exchange (HKEX) reported that China Asset Management, Harvest Global Investments, Bosera Asset Management, and HashKey Capital each listed a Bitcoin and Ethereum ETF. The trading volume for these new crypto ETFs was significantly lower than the first-day trading volume of US spot Bitcoin ETFs, which was valued at $4.6 billion.
According to OSL Digital Securities head Wayne Huang, Hong Kong already has a clear definition of Ethereum and it is not considered a security. He also emphasized that the regulation of cryptocurrency in Hong Kong is more straightforward than in the United States, where multiple departments are attempting to regulate it.
The six new crypto ETFs saw varying trading volumes on their first day. Bosera HashKey Bitcoin ETF had a trading volume of HKD 249,000, while Bosera HashKey Ether ETF recorded 99,000 HK$ in trading volume at the closing bell. China Asset Management's Bitcoin and Ethereum ETFs saw slightly higher volumes of 4.6 million HK$.
The launch of these new crypto ETFs follows a successful run for Hong Kong's cryptocurrency futures ETFs, which attracted $529 million in net inflows in the first quarter of 2024.
Despite the lower trading volumes on their first day, investors are optimistic about the potential growth of these new crypto ETFs. Local fund managers and brokerages are offering fee exemptions to attract investors, with Harvest waiving its management fee for six months and Borsera forgone its management fee for four months.
The launch of these new crypto ETFs in Hong Kong is a significant development in the world of cryptocurrency investment. It provides investors with more options and flexibility, as well as potentially easier access to these digital assets compared to traditional methods such as buying and holding them directly or using decentralized exchanges.
However, it is important for investors to remain vigilant and informed about the regulatory landscape surrounding cryptocurrencies in both Hong Kong and the United States. The SEC's stance on Ethereum's status as a security remains uncertain, which could impact the future of these new crypto ETFs if they are deemed to be investing in securities.
In conclusion, Hong Kong has made history by becoming the first financial hub to launch spot Bitcoin and Ethereum ETFs. While trading volumes were lower than expected on their first day, investors remain optimistic about their potential growth and the benefits they bring to the world of cryptocurrency investment.
