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- The Hong Kong Bitcoin ETFs experienced a lackluster start, with trading volumes far below those seen in the U.S. market.
- Despite the initial excitement, the ETFs have faced challenges, with outflows reported for the first time on May 6.
Last week, the spot Bitcoin ETFs went live for trading in Hong Kong creating a strong uproar in the crypto community. However, with a direct comparison to the U.S. spot Bitcoin ETFs, the Hong Kong funds have fallen short of expectations.
On May 6, Hong Kong spot crypto ETFs saw minimal trading activity, with a volume of just $7.7 million, a stark contrast to the $1.88 billion volume observed by their U.S. counterparts the previous trading day.
The Hong Kong spot Bitcoin and Ethereum ETF market experienced a sluggish performance, exacerbated by the ongoing volatility in the broader crypto market. Despite high expectations upon their launch, the six spot crypto ETFs have failed to meet asset managers’ projections. Rumors are that Hong Kong Bitcoin ETFs will open the gates for Chinese investors, reports Crypto News Flash.
Chinese blockchain reporter Colin Wu revealed in a recent report that all six products saw lackluster trade volumes of $7.72 million on May 6. While this figure may be considered reasonable, it pales in comparison to the $1.87 billion recorded by the 11 spot Bitcoin ETFs in the U.S. on May 3.
The total trading volume of the six Hong Kong Bitcoin and Ethereum spot ETFs on May 6 was HK$60.41 million, which was only US$7.72 million. The trading volume of 11 Bitcoin spot ETFs in the United States on the previous trading day was US$1.88 billion, which was 268x that of HK.…
— Wu Blockchain (@WuBlockchain) May 6, 2024
Interestingly, the U.S.-based spot Bitcoin ETFs experienced their lowest volume of $643.75 million on Feb. 5, just three weeks after their launch. Conversely, their highest 24-hour trade volume occurred on March 5, reaching an impressive $9.93 billion.
Hong Kong Bitcoin ETF’s – A Flop Show?
Just before their launch on April 30, there were high expectations for the Hong Kong spot Bitcoin and Ethereum ETFs, per the Crypto News Flash report. Zhu Haokang, a divisional head at ChinaAMC, one of the ETF issuers, anticipated that these ETFs would outperform their U.S. counterparts in trading volume upon debut.
However, the actual trading volume upon launch was only $112 million. This paled in comparison to the $4.54 billion volume recorded by the U.S. spot Bitcoin ETFs on their debut on Jan. 11. Since then, the Hong Kong-based ETFs have experienced a steady decline in trade volume, with the recent volume of $7.72 million marking a significant 93% drop from the debut figure. However, some of the top market analysts believe that comparing them with spot Bitcoin ETFs directly won’t be the right decision.
According to Bloomberg analyst Eric Balchunas, while the comparison between the Hong Kong and US ETF markets might not yield significant figures, the $310 million invested in Hong Kong ETFs is proportionally equivalent to $50 billion in the US market. Thus, these ETFs in Hong Kong are already substantial relative to their local market, mirroring the scale of US ETFs in their respective market
Yeah as we advised don’t expect big numbers in HK vs US (which is in league of own ETF-wise) but.. the the HK ETFs at $310m is equiv to $50b in US market. So in that regard these ETFs already as big to their local mkt as US ones are to its. https://t.co/4dIqAiZppJ
— Eric Balchunas (@EricBalchunas) May 6, 2024
On Monday, May 6, the Hong Kong Bitcoin ETFs reported cumulative daily outflows for the very first time. Yesterday, ChinaAMC’s spot Bitcoin ETF observed an outflow of 75.36 BTC, while the other two ETFs reported no inflows. This follows the initial trading day when the three funds collectively experienced an inflow of 3,910 BTC, as per data from SosoValue.
