Hong Kong’s spot Bitcoin exchange-traded funds (ETFs) have crossed an important milestone, managing assets worth over 2 billion Hong Kong dollars, which is about $256 million. This is a notable achievement, but the journey has been slower compared to similar ETFs in the United States.
When these ETFs launched on April 30, they saw a strong initial interest, pulling in $262 million in the first week. However, most of this amount was already committed before the official launch. The actual new investments during that week were only $14 million—a small sum compared to the billions that flowed into U.S. Bitcoin ETFs when they launched in January.
Over the past week, Hong Kong’s three Bitcoin ETFs saw a net inflow of around 247 Bitcoin (BTC), bringing their total holdings to about 4,450 BTC. Currently, the total assets under management (AUM) for these ETFs stand at approximately HK$2.1 billion, or $269 million.
Two of the ETFs, managed by China Asset Management and Harvest Asset Management in partnership with the digital trading platform OSL, account for more than HK$1.3 billion ($167 million) of the total. The third ETF, which operates independently of OSL, holds HK$776 million ($99.5 million), making up around 42% of the market.
The slower growth of Bitcoin ETFs in Hong Kong can be linked to the limited options available for investors compared to the 11 Bitcoin ETFs offered in the U.S. market. Many investors in Hong Kong are cautious, preferring to watch and wait before diving into cryptocurrency investments. This situation highlights the challenges Hong Kong faces in becoming a global hub for cryptocurrency trading.
Experts believe that Hong Kong’s unique approach to Bitcoin ETFs could attract more investors over time. Unlike U.S. Bitcoin ETFs, which are limited to cash transactions, Hong Kong’s ETFs allow for “in-kind” creations. This means that actual Bitcoin is used to create new ETF shares, potentially increasing investor confidence and participation in the future.
