The introduction of spot Bitcoin and Ethereum ETFs in Hong Kong commenced with lower than expected trading volumes, drawing stark contrasts to the initial success seen in the United States earlier this year.
On their first day, these ETFs managed a combined total of 87.58 million Hong Kong dollars ($12 million) in trading volume, significantly trailing the U.S. debut, which saw first-day volumes of $4.6 billion.
Breakdown of Individual ETF Performances
Among the six new crypto ETFs, the Bosera HashKey Bitcoin ETF recorded HK$249,000 in trading volume, while its Ether counterpart saw HK$99,000.
The China Asset Management (CAM) Bitcoin ETF fared notably better, with HK$4.6 million in trading, beginning the day at HK$8.080 and closing slightly lower at HK$7.950. Similarly, CAM’s Ether ETF also ended the day with HK$4.6 million in trading volume.
Efforts to Boost Investor Interest
In light of the lukewarm response, local fund managers and brokerages have initiated measures to attract more investors to these new financial products.
According to reports by the South China Morning Post, entities like Harvest have decided to waive management fees for six months, while Bosera will not charge management fees for four months.
These incentives aim to make these ETFs more appealing to potential investors.
Access for Mainland Chinese Investors
The Hong Kong Stock Exchange had previously noted substantial investor interest in its cryptocurrency futures ETFs, which were launched in late 2022.
These futures ETFs saw $529 million in net inflows in the first quarter of 2024 alone. The recent launch of spot BTC and ETH ETFs on April 30 was part of a broader attempt to expand accessible crypto investment products.
The availability of these ETFs to investors from mainland China remains uncertain due to KYC policies that may restrict participation based on mainland Chinese identity cards.
This mixed reception highlights the ongoing challenges and opportunities within the burgeoning crypto ETF market in Asia, as institutions continue to navigate varying levels of investor interest and regulatory landscapes.
