Hong Kong’s spot Bitcoin exchange-traded funds (ETFs) have quickly gained popularity, securing $230 million in assets under management (AUM) in their first week. This surpasses the AUM of virtual asset futures ETFs by nearly 80%, with China Asset Management Co. leading the way with the best performing ETFs in both Bitcoin and Ethereum. Other issuers such as Bosera International and HashKey Capital, as well as Harvest Global Investment, also saw significant AUM for their Bitcoin and Ethereum ETFs.
According to Sui Chung, the CEO of CF Benchmarks, a Kraken subsidiary, the slow start for these crypto ETFs in Hong Kong is expected to pick up momentum and reach over $1 billion in AUM by the end of 2024. The launch of these ETFs in Hong Kong provides investors with additional options, especially for those who may prefer the benefits of Hong Kong’s tax structure and regulatory environment over those in North America or Europe. BitGo’s Managing Director of the Asia-Pacific region, Hobeng Lim, highlighted the advantages that investors may see in choosing Hong Kong-based ETFs.
Despite the comprehensive regulatory framework for virtual assets in Hong Kong, there are still areas for improvement. Lim suggested the need for a regulatory framework for independent virtual asset custodians to provide more options for custody services, as well as adjustments to regulations for over-the-counter (OTC) trading of virtual assets. These enhancements could further strengthen Hong Kong’s position as a preferred destination for virtual asset investment.Overall, the success of these spot Bitcoin ETFs in Hong Kong highlights the growing demand for crypto investment products in the region and the potential for continued growth in the future. By offering alternative options for investors and addressing regulatory challenges, Hong Kong can solidify its position as a key player in the global crypto market.
