Hong Kong’s First Spot Bitcoin and Ethereum ETFs begin Trading

In the early hours of today, spot Bitcoin and Ethereum exchange-traded funds (ETFs) finally made their debut on the Hong Kong markets, following earlier approval by the region's regulator.

As previously reported by Whaleinsider, the Asian city announced on April 24 that it is in the final preparations to kickstart its First Spot Bitcoin and Ethereum ETFs trading on April 30.

Six-spot ETFs for bitcoin and ether have made their official debuts on the Hong Kong Stock Exchange today, demonstrating the area's ongoing efforts to establish itself as a center for the cryptocurrency industry.

The following three managers—Bosera Funds, China Asset Management (Hong Kong) Limited, and Harvest Global Investments—are the issuers of six of the crypto exchange-traded funds (ETFs) available on the Hong Kong stock exchange.

The ETFs, which are currently listed and trading on Hong Kong Exchanges and Clearing Ltd., or HKEX, are Harvest Bitcoin Spot ETF (3439.HK), Harvest Ether Spot ETF (3179.HK)., Bosera HashKey Bitcoin ETF (3008.HK), Bosera HashKey Ether ETF (3009.HK), ChinaAMC Bitcoin ETF (3042.HK), and ChinaAMC Ether ETF (3046.HK).

The spot bitcoin and ether ETF issued by each company can be traded in both Hong Kong and US dollars, while ChinaAMC (HK) also allows trading in the Chinese yuan.

With the exception of those on the Chinese mainland who are still prohibited from investing in the products, this is available to investors located in Hong Kong as well as to some qualified investors outside the city.

At the morning bell-tolling ceremony, Joseph Chan, the city's undersecretary for financial services, stated, "These are the first spot ETF products of virtual assets in (the) Asia market, which has proven Hong Kong's leading status in virtual asset development in the region." He added that the government has made plans to submit a proposal for creating a license scheme for over-the-counter (OTC) digital asset trading services to the city’s legislature.

Asia’s #first Spot Virtual Asset ETFs are here, further enhancing the diversity and liquidity of Hong Kong’s ETP market. Many #congratulations on the listing of six Spot VA ETFs today!

Learn more: https://t.co/wUmxq4bJSj pic.twitter.com/WWzIE9EQjT

Hong Kong's Spot Bitcoin and Ethereum ETFs Performance on the First Trading Day

As per the data released by the Hong Kong Stock Exchange (HKEX), there appears to be very little investor interest in the six-spot Bitcoin and Ether ETFs, as indicated by their relatively flat performance.

The Bitcoin and Ether ETFs from China Asset Management (CAM) performed better than the rest of the group, registering trading volumes of 4.6 million HK$ each. With 249,000 HK$ in trading volume on its first day, the Bosera HashKey Bitcoin ETF got off to a somewhat slow start. The Bosera HashKey Ether ETF, which saw 99,000 HK$ in trading volume on the day, similarly had a weak performance.

The launch of Hong Kong’s Spot Bitcoin and Ethereum ETFs comes three months after the U.S. approved ETFs based on the spot price of bitcoin, facilitating the addition of the unit to the portfolios of mainstream investors.

Comparing the trading volume of the six crypto ETFs and that of U.S. spot Bitcoin ETFs on the first day, it will interest you to know that the U.S. outstanding record in January still stands.

The combined trading volume for the six new cryptocurrency ETFs on the first day was roughly HK$87.5 million ($11.2 million), despite the anticipation of the day of listing. This is relatively small compared to the $4.6 billion trading volume that U.S. spot Bitcoin ETFs registered on the first day of trading in January.

Industry experts predict the new funds may not attract the same level of inflows as those in the United States.

However, Han Tongli, CEO of Harvest Global, said Hong Kong ETFs have an obvious advantage as they allow investors to carry out in-kind creation and redemption through eligible dealers. In-kind trading in Hong Kong means Bitcoin and Ethereum can be used to purchase ETFs instead of official currencies like the US dollar.

Han added that he believes Hong Kong is not competing against other peers in the city but against the large fund management companies in the U.S. to defend and develop Hong Kong's status as an international financial hub.

According to the South China Morning Post, in an effort to entice investors to the new cryptocurrency ETFs, local fund managers and brokerages are waiving fees. Borsera has waived its management fee for four months, while Harvest is waiving its fee for six months.

The launch of Asia's first spot bitcoin and ether exchange-traded funds (ETFs) marks the beginning of a new chapter in the financial markets' history as the city aims to become a regional virtual asset investment hub. 

Disclaimer: This information should not be considered financial advice by any means. Please do your own research before making any investment decisions. The views in the articles are personal opinions only. Whale Insider is not responsible for any financial losses incurred.