In this illustration taken on June 16, 2023, a representation of the cryptocurrency Bitcoin is placed on the motherboard of a PC.
Dado Ruvik | Reuters
The Hong Kong Securities and Futures Commission (SFC) approved three ETF providers two weeks ago.
The Spot Bitcoin ETF by ChinaAMC, Bosera HashKey, and Harvest rose more than 3% in early trading, but has since given up some gains to trade up about 1.5%. The three Ether ETFs were trading above 1% in the morning, but fell into negative territory by late afternoon.
As of 3:50 a.m. ET, Bitcoin was trading at $63,218, while Ethereum was trading at $3,159, according to data from Coinmetrics.
Hong Kong was one of the first countries in the world to approve Ether ETFs. In January, the U.S. Securities and Exchange Commission approved changes to allow the creation of Bitcoin ETFs in the U.S., but has not yet approved an Ether ETF.
Crypto ETFs allow investors to gain exposure to the price movements of the underlying assets without directly owning the assets.
This move is seen as positive for the Hong Kong market.
Antoni Trenchev, co-founder of cryptocurrency exchange Nexo, said: “There's a bigger game going on here. With the launch of these new ETFs, Hong Kong is also establishing itself as a regulated hub for digital assets. “It will put us one step ahead of Singapore and Dubai, which are trying to do that.” he told CNBC on Tuesday.
“First mover advantage is everything in this game.”
Trenchev said Japan, Singapore and South Korea could approve similar products within the next two years.
Executives at a Chinese asset management firm announced the debut of their ETF on the Hong Kong Stock Exchange on Tuesday morning, a move that will allow institutional and retail investors to enter the regulated market to trade crypto assets and expand financial He emphasized that this will enable the creation of a diverse product base for institutions. Wider interaction.
“The market potential is twice that of our U.S. peers,” Tongli Han, CEO of Harvest Global Investments, told CNBC.
According to the Hong Kong Exchange, the combined average daily volume of the three VA Futures ETFs listed on the exchange reached HK$51.3 million ($6.6 million) in the first quarter of 2024, compared to HK$8.9 million in the same period last year. It increased from
Additionally, the Futures ETF had net inflows of HK$529 million in the first quarter.
Harvest Global's Han said he expects growth in Hong Kong-managed crypto assets to slow initially, as many investors initially prefer to stay on the sidelines. But he said he expects demand to pick up over time.
Nexo's Trenchiff noted that Hong Kong's ETF market is relatively small and could take years to match the “$12.4 billion in net inflows of its U.S. peers.”
CNBC asked HashKey what kind of regulation it would like to see in the wake of the scandals involving FTX and Binance.
“We set an example and then showed how cryptocurrencies can be reasonably regulated in a very user-friendly or industry-friendly way. Of course, we would like to see the pace pick up a little bit more.” said Executive Director Hedy Tsang. HashKey Exchange's told his CNBC.
—CNBC's Emily Chan and Yolande Chee contributed to this report.
