Originally published on: August 24, 2024
Hong Kong’s spot Bitcoin exchange-traded funds (ETFs) have surpassed an impressive milestone, reaching over 2 billion Hong Kong dollars (approximately $256 million) in assets under management (AUM).
Compared to their counterparts in the United States, the Hong Kong Bitcoin ETFs have had a slower start. Data from SoSo Value reveals that the three spot BTC ETFs in Hong Kong saw a net inflow of about 247 BTC in the past week, boosting their total holdings to around 4,450 BTC. With this influx, the total AUM for these ETFs now stands at approximately HK$2.1 billion ($269 million).
Leading the pack are ETFs from China Asset Management and Harvest Asset Management, which, in collaboration with digital asset trading platform OSL, hold more than HK$1.3 billion ($167 million) in AUM. The third spot Bitcoin ETF, operating independently of OSL, holds HK$776 million ($99.5 million), representing about 42% of the market share.
Despite the notable progress, Hong Kong investors still have a limited selection of options for exposure to BTC compared to the expansive range of 11 offerings in the US market.
While recent inflows have been encouraging, Hong Kong’s spot Bitcoin ETFs have not quite matched the success of their US counterparts. In their initial week post-launch on April 30, the ETFs in Hong Kong attracted a total of $262 million in inflows, with a mere $14 million of actual asset inflows during that period. This pales in comparison to the significant billions that flowed into US spot Bitcoin ETFs upon their January launch.
This discrepancy underscores the challenges that Hong Kong faces in establishing itself as a global cryptocurrency investment hub. Despite the unique opportunity presented by the city’s in-kind ETF creation model to boost AUM and trading volume, it still trails behind the US market in terms of investor interest and capital inflows.
As observed by Bloomberg ETF analyst Rebecca Sin, Hong Kong has yet to catch up to the US market’s level of engagement. However, with the potential for growth and development in the cryptocurrency space, there is optimism for Hong Kong’s future in the ever-evolving world of digital assets.
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