Hong Kong’s crypto ETFs have lagged behind US spot ETFs, which own $55 billion. After early enthusiasm, Hong Kong’s crypto ETF launch was underwhelming. Bloomberg reported that six Hong Kong Bitcoin and Ether ETFs lost $25 million in inflows from $293 million.
American spot ETFs have attracted $12.1 billion in net inflows and $55 billion in total. This accomplishment shows how hard Hong Kong struggles to compete with the US in crypto trading.
Hong Kong’s trade industry is smaller than the US’s. Authorities anticipated crypto ETFs would increase trading and attract market makers.
The city wants to compete with crypto centers like Singapore and Dubai and regain its financial center status. Beijing appears unconcerned with Hong Kong’s crypto growth while prohibiting crypto trading in mainland China.
Le Shi, head of trading at Auros, attributed Hong Kong’s crypto ETFs’ chilly reaction to being outperformed by the US and uncertainties about China’s crypto policy. Potential investors are wary.
Harvest Global Investments and a consortium comprising HashKey Capital and Bosera Asset Management launched locally on April 30, which didn’t help. Mainland Chinese investors cannot access these funds, and this may change.
Rebecca Sin, Bloomberg Intelligence ETF analyst, sees potential. Growth is possible with $250 million in assets. Sin predicts additional issuers and $1 billion in ETFs within two years.
