CF Benchmarks, a subsidiary of cryptocurrency exchange Kraken, predicts that crypto exchange-traded funds (ETFs) in Hong Kong will overcome their lackluster start and accumulate over $1 billion in assets under management (AUM) by the end of 2024. CF Benchmarks offers reference data for crypto ETFs, focusing mainly on bitcoin products. The company currently manages approximately $24 billion in AUM in this market, representing about half of the crypto benchmarking market. Despite low trading volume during their recent debut, CF Benchmarks is now collaborating with new ETFs in Hong Kong, licensing its benchmarks to funds and charging fees that increase with the growth of AUM.
The CEO of CF Benchmarks expects crypto ETFs to expand to other countries as well. CEO Sui Chung anticipates their arrival in South Korea and Israel, noting that South Korea has embraced ETFs as a preferred long-term savings option and has shown high adoption rates for digital assets. Previously, CF Benchmarks expected $5 billion of assets for US spot-Bitcoin ETFs this year, but the amount has surpassed expectations, reaching over four times that estimate. Chung predicts that Hong Kong products could accumulate as much as $1 billion in funds under management by the end of 2024. The introduction of US ETFs led to a rally that propelled Bitcoin to a record high of nearly $74,000 in March, but since then, the token has experienced a decline as investor demand for the funds waned.
CF Benchmarks, headquartered in London, expects significant revenue growth in the “mid-double digits” this year, according to Chung. The firm’s most recent UK accounts show that revenue reached £6 million ($7.5 million) in 2022. To support its expansion, the company plans to increase its workforce by approximately one-third, surpassing 40 employees. Kraken acquired CF Benchmarks in 2019 for a nine-figure sum, providing Bitcoin pricing for derivatives on the Chicago Mercantile Exchange, which remains a significant revenue stream for the company. Hong Kong has launched its first batch of ETFs focused on cryptocurrencies, marking potential competition for popular Bitcoin products in the United States. Harvest Global Investments Ltd. and a partnership between HashKey Capital Ltd. and Bosera Asset Management (International) Co. listed Bitcoin and Ether ETFs in the city, with Bloomberg Intelligence’s Rebecca Sin estimating that these funds could amass around $1 billion over the next two years.
CF Benchmarks is collaborating with new ETFs in Hong Kong, licensing its benchmarks to funds and charging fees that increase with the growth of AUM. The company sees potential for crypto ETFs to expand to other countries, with CEO Sui Chung anticipating their arrival in South Korea and Israel. Chung predicts that Hong Kong products could accumulate $1 billion in funds under management by the end of 2024. CF Benchmarks expects significant revenue growth this year and plans to increase its workforce to support its expansion. Kraken acquired CF Benchmarks in 2019 for a nine-figure sum, providing Bitcoin pricing for derivatives on the Chicago Mercantile Exchange. Harvest Global Investments Ltd. and a partnership between HashKey Capital Ltd. and Bosera Asset Management (International) Co. have listed Bitcoin and Ether ETFs in Hong Kong, marking potential competition for popular Bitcoin products in the United States.
