As Hong Kong gears up for the debut of its first-ever Bitcoin and Ethereum spot ETFs, expectations are soaring higher than Elon Musk’s imagination. Local media reported on April 29th that initial trading volumes are expected to outshine those seen during similar launches in the US.

Related: Hong Kong’s First Spot Bitcoin ETF  Expected in April


Two spot Bitcoin ETF issuers have claimed that the ETFs have generated a lot of buzz and are poised to break records. Huaxia Fund Management (Hong Kong), along with digital asset service provider OSL, are leading the charge for these ETF launches.

During a pre-launch press briefing, Huaxia’s Head of Digital Assets Department, Zhu Haokang, expressed rock-solid confidence in the ETFs’ potential, predicting trading volumes could surpass $125 million on the first day, dwarfing the figures of spot Bitcoin ETFs launched in the US back in January. Zhu noted a high level of interest leading up to the launch, further fueled by the fact that these ETFs offer both cash and physical settlement options, a combo not available in the US market.

Meanwhile, Wayne Huang from OSL detailed their operational readiness, emphasizing that significant resources have been mobilized in anticipation of the launch. He added that pre-market deals indicate high demand, which is expected to carry over into the first day of official trading.

These ETFs, pioneering spot trading of Bitcoins and Ethereum directly through the exchange in Asia, aim to attract both local and international investors, offering more flexible investment mechanisms compared to their American counterparts.

Hong Kong’s ETF Revolution

The launch is being hailed as a turning point for Hong Kong’s digital asset market, positioning the city as a leading global financial hub in the ever-expanding realm of digital assets. Both Huaxia and OSL have highlighted the clarity of regulation and the innovative trading features of their products as key factors expected to contribute to their success and appeal to a diverse investor base, including regions lacking existing crypto ETFs, such as Singapore and the Middle East.

Market participants believe that Hong Kong’s ETFs, come what may, will continue to wield significant influence over the market. Meanwhile, some analysts have recently predicted that Bitcoin ETFs based in Hong Kong are unlikely to see a total inflow of more than $1 billion within the first year, considering the market size and the fact that investors from mainland China won’t be allowed to interact with them. As practice has shown, these analysts were closer to the truth than those from Huaxia and OSL. 


Expectation vs. Reality

The debut of Bitcoin and Ethereum exchange-traded funds (ETFs) in Hong Kong kicked off with trading volumes, totaling 87.58 million Hong Kong dollars, equivalent to a mere $11.19 million, based on the Hong Kong Stock Exchange data.

These trading volumes fall significantly short of the initial expectations of issuers, who were hoping to break the $100 million mark. Moreover, the trading volume pales in comparison to the US debut, where trading volumes for 11 spot Bitcoin ETF products reached a staggering $4.6 billion.

Source: Tenor

According to HKEX data, China Asset Management’s ChinaAMC Bitcoin ETF led the pack in terms of trading volume, clocking in at 37.16 million Hong Kong dollars during the first trading session. Its Ether ETF also secured the highest volume among Ethereum-based ETFs with a turnover of 12.66 million Hong Kong dollars.

Other issuers, such as Harvest’s spot Bitcoin ETF, raked in 17.89 million Hong Kong dollars, while its Ether ETF managed 4.95 million Hong Kong dollars. Similarly, Bosera HashKey’s Bitcoin ETF reported a volume of 12.44 million Hong Kong dollars, with its ETH ETF trailing at 2.48 million Hong Kong dollars.

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These ETFs were aimed at international investors adhering to local compliance standards. By adopting this approach, companies sought to broaden their investor base, boost liquidity, and fortify market stability. Consequently, these ETFs were available in various currencies, including Hong Kong dollars (HKD), US dollars, and Chinese yuan (RMB).

Despite the modest trading volume, stakeholders are still expecting a significant impact on the market. The innovative features and regulatory clarity highlighted by issuers Huaxia and OSL suggest that these products have the potential to attract a diverse investor base, both locally and internationally.

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