Bitcoin and Ethereum spot ETFs begin trading in Hong Kong with high expectations

Hong Kong-listed bitcoin and ethereum exchange-traded funds (ETFs) will debut in a few minutes. In anticipation of the launch, Zhu Haokang, head of digital asset management and head of family wealth at China Asset Management, is confident that the launch scale of Hong Kong virtual asset spot ETFs will surpass the initial scale of US$125 million. from the United States.

“I am very confident that the initial listing scale of Hong Kong virtual asset spot ETF (more than $125 million) can surpass the US first-day issuance scale,” Haokang said. saying at a press conference.

Haokang confirmed that mainland Chinese investors are prohibited from participating in these ETFs, while qualified Hong Kong investors, institutional investors, retail investors and international investors who comply with regulations are given the green light.

He also noted that ETFs have sparked significant global interest, especially in regions such as Singapore and the Middle East that lack similar offerings. The physical subscription method allows bitcoin miners to invest directly using their bitcoin holdings.

Wayne Huang of OSL clarified that the possible classification of ethereum as a security in the US would not affect Hong Kong crypto ETFs due to the independent regulatory processes of the Hong Kong Securities and Futures Commission (SFC).

Hong Kong can launch the world's first ethereum spot ETF because the SFC has already clearly defined its regulatory framework, considering ethereum a worthless virtual asset, Huang added.

“Hong Kong has already had a clear definition of ethereum. “ethereum is not a security, but the first non-security virtual asset to be included in Hong Kong supervision along with bitcoin, and is one of the two targets that can be offered to retail investors,” Huang said.

Additionally, it reported that talks are underway to expand the range of virtual assets available on the Hong Kong ETF market.

The launch is expected to have a positive effect on cryptocurrency prices by increasing liquidity, encouraging regulatory compliance and opening new capital channels.

Commenting on the upcoming debut of bitcoin and ethereum ETFs in Hong Kong, Bloomberg ETF analyst Eric Balchunas suggests that this will be an opportunity to directly compare demand and investment flows in ethereum ETFs with those bitcoin ETFs.

He estimates that ethereum could capture 10% or less of net flows compared to bitcoin.

<blockquote class="twitter-tweet” data-width=”500″ data-dnt=”true”>

Note also that this is the first time we will clearly see how popular eth is relative to btc in ETF format. What percentage of the net flows do you think they will capture? I think 10% or less, James is more optimistic. https://t.co/ZKggtAGQIH

– Eric Balchunas (@EricBalchunas) twitter.com/EricBalchunas/status/1785085007398080989?ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow noopener noreferrer”>April 29, 2024

Previously, Balchunas said the impact of the launch will likely be minor compared to that of the US market, considering the nascent state of the Hong Kong ETF market, which currently holds only $50 billion in assets, as well as other factors such as fee structures and the preferences of Chinese investors. restrictions.

However, he sees Hong Kong-listed crypto ETFs as a long-term positive for bitcoin adoption.

The price of bitcoin has risen in the last few hours. It is currently trading at $64,000, up more than 1.5% after falling below $62,000 today, according to CoinGecko.

Meanwhile, ethereum is around $3,200, down 1.4% in the last 24 hours.