TL;DR
- Hong Kong’s Bitcoin and Ethereum ETFs had a disappointing debut, with the six listed crypto ETFs only managing to push $11 million in volume, significantly less than the expected initial volume of over $100 million.
- The underperformance of these ETFs had a ripple effect on the cryptocurrency market, with Bitcoin down nearly 2%, trading below $62,000, and Ether dropping nearly 5%, trading at around $3,000.
- The soft debut of these ETFs raises questions about the readiness of the market for such products, despite the growing adoption of ETFs in institutional asset allocation and retail trading in Hong Kong.
Hong Kong’s much-anticipated Bitcoin and Ethereum exchange-traded funds (ETFs) had a disappointing debut, falling short of initial expectations. The six listed crypto ETFs managed to push only $11 million in volume, with Bitcoin ETFs posting $8.5 million and Ether ETFs at $2.5 million. This was a far cry from the expected initial volume of over $100 million.
The Hong Kong Securities and Futures Commission (SFC) has formally given the green light to several spot Bitcoin and Ethereum ETFs, which include those from ChinaAMC, Harvest, and Bosera HashKey. Despite starting trading on April 30, the total trading volume only reached a modest $11 million, falling significantly short of projections.
The soft debut of Hong Kong’s crypto ETFs comes as a surprise, especially considering the growing adoption of ETFs in institutional asset allocation and retail trading in Hong Kong.
The Impact of ETFs’ Performance on the Bitcoin and Ethereum Market
In the past, Thomas Zhu, who is the head of ChinaAMC’s digital assets and family office business, had highlighted the advantages of these spot Bitcoin and Ether ETFs by saying that they offer a controlled setup in which both retail and institutional investors can safely and effortlessly engage with digital assets.
The disappointing performance of the ETFs also had a ripple effect on the cryptocurrency market. Bitcoin was down nearly 2%, trading below $62,000. Ether, on the other hand, suffered heavier losses, dropping nearly 5% and trading at around $3,000. The dip in Bitcoin and Ethereum prices reflects the market’s reaction to the underwhelming performance of the ETFs.
The crypto industry sees ETFs as a way to make digital assets more common and easy for many people to get. However, the soft debut of Hong Kong’s Bitcoin and Ether ETFs raises questions about the readiness of the market for such products. It remains to be seen how the market will respond in the coming days and whether the ETFs will be able to gain traction among investors.
