First-day trading proves challenging for Hong Kong’s Bitcoin and Ether ETFs

Hong Kong’s introduction of spot Bitcoin and Ethereum exchange-traded funds (ETFs) has faced challenges in comparison to the successful launch of similar ETFs in the United States. While the Hong Kong ETFs generated a trading volume of 87.58 million Hong Kong dollars ($12 million) on their first day, this figure pales in comparison to the $4.6 billion trading volume of US spot Bitcoin ETFs. The Hong Kong Stock Exchange (HKEX) reported a relatively flat performance and limited interest in the six spot Bitcoin and Ether ETFs managed by China Asset Management, Harvest Global, Bosera, and HashKey. The Bosera HashKey Bitcoin ETF recorded a trading volume of 249,000 HK$, while the Bosera HashKey Ether ETF had a trading volume of 99,000 HK$. On the other hand, the China Asset Management (CAM) Bitcoin ETF saw a trading volume of 4.6 million HK$, and the CAM Ether ETF recorded the same trading volume by the end of the day. Prior to trading, CAM’s spot Bitcoin and Ethereum ETFs had attracted a subscription size of $140 million. The HKEX had previously experienced investor interest in its cryptocurrency futures ETFs, which were launched in late 2022 and saw $529 million in net inflows in the first quarter of 2024. In an effort to attract investors, local fund managers and brokerages in Hong Kong are offering fee exemptions for the new crypto ETFs. Harvest has waived its management fee for six months, while Bosera has done the same for four months. It has been suggested that investors in mainland China may also have access to these ETFs, although this could be subject to Know Your Customer (KYC) policies related to mainland Chinese identity cards.