Bitcoin, Ethereum spot ETFs start trading in Hong Kong with high expectations

Hong
Kong-listed
spot
Bitcoin
and
Ethereum
exchange-traded
funds
(ETFs)
are
set
to
debut
in
a
few
minutes.
In
anticipation
of
the
launch,
Zhu
Haokang,
Digital
Asset
Management
Director
and
Family
Wealth
Director
at
China
Asset
Management,
is
confident
that
the
launch
scale
of
Hong
Kong’s
virtual
asset
spot
ETFs
will
exceed
the
US’s
initial
$125
million
scale.

“I
am
very
confident
that
the
initial
listing
scale
of
Hong
Kong’s
virtual
asset
spot
ETF
(more
than
US$125
million)
can
exceed
the
issuance
scale
on
the
first
day
of
the
United
States,”
Haokang

said
in
a
press
briefing.

Haokang
confirmed
that
mainland
Chinese
investors
are
barred
from
participating
in
these
ETFs,
while
Hong
Kong’s
qualified
investors,
institutional
investors,
retail
investors,
and
international
investors
who
comply
with
the
regulations
have
the
green
light.

He
also
noted
that
the
ETFs
have
garnered
significant
global
interest,
especially
from
regions
like
Singapore
and
the
Middle
East
that
lack
similar
offerings.
The
physical
subscription
method
allows
Bitcoin
miners
to
invest
directly
using
their
Bitcoin
holdings.

Wayne
Huang
of
OSL
clarified
that
Ethereum’s
potential
classification
as
a
security
in
the
US
would
not
impact
Hong
Kong
crypto
ETFs
due
to
the
independent
regulatory
processes
of
the
Hong
Kong
Securities
and
Futures
Commission
(SFC).

Hong
Kong
is
able
to
launch
the
world’s
first
spot
Ethereum
ETF
because
the
SFC
has
already
defined
its
regulatory
framework
clearly,
considering
Ethereum
as
a
non-security
virtual
asset,
Huang
added.

“Hong
Kong
has
already
had
a
clear
definition
of
Ethereum.
Ethereum
It
is
not
a
security,
but
the
first
non-securities
virtual
asset
to
be
included
in
Hong
Kong
supervision
together
with
Bitcoin,
and
it
is
one
of
the
two
targets
that
can
be
provided
to
retail
investors,”
Huang said.

Additionally,
he
reported
that
discussions
are
ongoing
to
expand
the
range
of
virtual
assets
available
in
Hong
Kong’s
ETF
market.

The
launch
is
anticipated
to
have
a
positive
effect
on
crypto
prices
by
increasing
liquidity,
encouraging
regulatory
compliance,
and
opening
new
capital
channels.

Commenting
on
the
upcoming
debut
of
Bitcoin
and
Ethereum
ETFs
in
Hong
Kong,
Bloomberg
ETF
analyst
Eric
Balchunas
suggests
that
this
will
be
an
opportunity
to
compare
demand
and
investment
flows
into
Ethereum
ETFs
against
Bitcoin
ETFs
directly.

He
estimates
that
Ethereum
might
capture
10%
or
less
of
net
flows
compared
to
Bitcoin.

Note
also
that
this
is
the
first
time
we
will
get
clean
look
at
how
popular
Eth
is
relative
to
btc
in
ETF
format.
What
%
of
the
net
flows
do
you
think
they
will
grab?
I
think
10%
or
less,
James
more
optimistic.

https://t.co/ZKggtAGQIH

—
Eric
Balchunas
(@EricBalchunas)

April
29,
2024

Previously,
Balchunas
said
the
launch’s
impact
will
likely
be
minor
compared
to
that
of
the
US
market,
considering
the

nascent
state
of
Hong
Kong’s
ETF
market,
which
currently
holds
only
$50
billion
in
assets,
as
well
as
other
factors
like
fee
structures
and
China
investors’
restrictions.

However,
he
sees
the
Hong
Kong-listed
crypto
ETFs
as
a
long-term
positive
for
Bitcoin
adoption.

Bitcoin’s
price
has
climbed
over
the
past
few
hours.
It’s
currently
trading
at
$64,000,
up
over
1.5%
after
dipping
below
$62,000
earlier
today,
according
to
CoinGecko.

Meanwhile,
Ethereum
is
hovering
around
$3,200,
down
1.4%
in
the
last
24
hours.