Bloomberg analysts revised their previous forecasts, having expected about $500 million in inflows during the same period.
Eric Balchunas, senior ETF analyst at Bloomberg, previously estimated that these funds will attract about $500 million in inflows during the same period due to concerns about the qualifications of Chinese investors and the lack of maturity of Hong Kong's ETF market.
Unknown investment exposure for Chinese investors
Eric Balchunas highlights the challenges facing Chinese investors seeking exposure to Hong Kong’s newly approved ETFs.
Eric Balchunas, senior ETF analyst at Bloomberg, highlighted the challenges Chinese investors face when investing in Hong Kong’s newly approved ETFs.
Balchunas cited a report by colleague Rebecca Sin, highlighting that China’s ban on underlying assets associated with these ETFs complicates accessibility for interested investors in the jurisdiction.
China has long had strict regulations on the nascent cryptocurrency industry. The country initially banned cryptocurrencies in 2013 and expanded restrictions to mining in 2021.
Additionally, Sin’s analysis notes that Chinese retail investors may try to circumvent this restriction by utilizing the $50,000 remittance quota to invest in these ETFs.
However, the viability of this investment avenue remains uncertain for institutional investors due to its limited functionality and potential regulatory hurdles that may arise.
Assets under management (AUM) reached US$1 billion
While the restrictions pose significant challenges for crypto ETFs listed in Hong Kong, analysts still expect them to attract significant interest and predict they will reach $1 billion in assets under management within their first two years.
Balchunas explained that reaching the $1 billion milestone relies on significant improvements in Hong Kong’s financial infrastructure and ecosystem.
Currently, the Bitcoin ETF AUM in the Asia-Pacific region is $250 million, distributed among five ETFs, three of which are in Hong Kong and two in Australia. The largest fund is the Hong Kong-listed CSOP Bitcoin Futures ETF, with AUM of $121 million.
Of the three companies preparing to launch spot ETFs, Harvest Fund Management and Bosera Asset Management together manage nine ETFs with a combined value of $50 million. In contrast, China Asset Management, with 15 ETFs and $3.6 billion in AUM, is a major player and is expected to have a considerable impact when it launches its spot crypto ETF. #香港比特币现货etf #交易所交易基金
