Harvest and other companies submitted applications for Bitcoin spot ETFs to the Hong Kong Securities Regulatory Commission as early as January 26. On April 15, China Asset Management, Bosera Asset Management, and Harvest International announced that they had obtained approval from the Hong Kong Securities Regulatory Commission (SFC) to issue ETF products that invest in spot Bitcoin and spot Ethereum. On April 24, the fund company confirmed that the date for public trading would be April 30.
Before the opening of the market on April 29, China Asset Management said that it was very confident that the initial issuance scale of the Hong Kong crypto asset spot ETF (more than US$125 million) would exceed the issuance scale of the first day in the United States (the issuance scale here refers to IOP, not the inflow amount on the first day). Singapore, the Middle East and other places have contacted a large number of investors with great interest. At present, mainland Chinese investors are not allowed to invest in Hong Kong's cryptocurrency spot ETFs. Qualified investors, institutional investors, retail investors and international investors who meet the regulations in Hong Kong can invest in cryptocurrency spot ETFs. The United States' determination that Ethereum is a security will not affect Hong Kong. Hong Kong has long had a clear definition of Ethereum. Ethereum is not a security, but the first non-securities crypto asset to be included in Hong Kong's supervision together with Bitcoin, and it is one of the two targets that can be provided to retail investors for trading.
According to estimates by people familiar with the matter, based on current prices, the final market size of Hong Kong's cryptocurrency spot ETF could reach at least US$2-3 billion. Although this is far lower than the US market (currently over US$50 billion), it is higher than the US$500 million estimated by US analysts earlier.
On April 30, China Asset Management said that its Bitcoin spot ETF and Ethereum spot ETF were successfully listed today, with the first issuance of IOP of HK$950 million for China Asset Management Bitcoin ETF and HK$160 million for China Asset Management Ethereum ETF. Analysts pointed out that China Asset Management has invested a lot of distribution work in IOP, while the main clients of Harvest and Bosera did not subscribe in the IOP stage, and there may be more funds coming in later. HashKey Capital issued a statement saying that non-Hong Kong residents can also subscribe or purchase ETF products if they meet local regulatory requirements, such as passing customer due diligence.
One hour after the opening, data from the official website of the Hong Kong Stock Exchange showed that the transaction amount of the first six Bitcoin and Ethereum spot ETF funds launched in Hong Kong totaled more than HK$37 million (US$4.73 million). At the end of the morning session, the trading volume of the six newly listed Bitcoin and Ethereum spot ETFs in Hong Kong was about HK$49.4 million (about US$6.3 million), among which Huaxia Bitcoin ETF led the trading volume, reaching HK$22.97 million; Huaxia Ethereum ETF was second, reaching HK$10.47 million.
At the close of the 30th, the total trading volume of the first six crypto asset spot ETFs issued in Hong Kong was about HK$87.58 million (US$12 million). In comparison, the first-day trading volume of the US Bitcoin ETF was as high as US$4.6 billion, 383 times the first-day trading volume in Hong Kong. Among them, the trading volume of China Asset Bitcoin ETF (3042 HK) was HK$37.16 million, the trading volume of China Asset Ethereum ETF (3046 HK) was HK$12.66 million, the trading volume of Bosera HashKey Bitcoin ETF (3008 HK) was HK$12.44 million, the trading volume of Bosera HashKey Ethereum ETF (3009 HK) was HK$2.48 million, the trading volume of Harvest Bitcoin Spot ETF (3439 HK) was HK$17.89 million, and the trading volume of Harvest Ethereum Spot ETF (3179 HK) was HK$4.95 million. At the same time, the six crypto asset spot ETFs all fell below the opening price at the close.
Robin Lo, head of securities product development at the Hong Kong Stock Exchange, said that before the listing of the first batch of spot ETFs today, after the listing of Hong Kong's first batch of virtual asset futures ETFs in 2022, the average daily trading volume of the three virtual asset futures ETFs increased from HK$8.9 million in 2023 to HK$51.3 million in the first quarter of 2024, while also attracting HK$529 million in capital inflows.
Cai Fengyi, executive director of the Investment Products Department of the Hong Kong Securities and Futures Commission, said that although the crypto asset market has faced a lot of turmoil in recent years, including the collapse of stablecoins and the closure of trading platforms, which have caused investors to suffer heavy losses, there is still a lot of investment demand in the market, so it is decided to formulate a comprehensive regulatory framework to approve the listing of regulated crypto asset spot ETFs, which is considered to be in the public interest. The SFC's approval of the listing of relevant ETFs does not mean support or encouragement for the public to invest in related crypto assets. It reiterates that the regulatory system cannot exempt the various risks of the market itself, especially the high speculation of crypto assets and the high volatility of prices. It reminds that only investors who can bear the risks should consider it. She mentioned that the listing of crypto asset ETFs is an important milestone in the development of Hong Kong's ETF market. As the China Securities Regulatory Commission has proposed a number of measures to optimize the interconnection system, including relaxing the scope of eligible ETF products, it is believed that in the current challenging market environment, it can inject new impetus into Hong Kong's financial development in a timely manner. In the future, it will continue to study and promote the industry to make full use of relevant measures.
HashKey Group said it will continue to purchase renewable energy certificates based on the holdings of Bosera HashKey Bitcoin ETF and participate in the "greening" action in the name of investors. An exclusive "Green Bitcoin ETF" area will be opened on GreenBTCClub to offset the carbon emissions generated by the historical energy consumption of global Bitcoin mining. Investors will have the opportunity to receive a unique NFT medal. GreenBTCClub is an inclusive climate action network driven by DePIN+ReFi, and is implemented based on the tokenized green certificate asset protocol deployed by arkreen for on-chain issuance and on-chain consumption.
According to PANEWS, HashKey's Weng Xiaoqi said that for traditional people, they can seize this round of strong virtual asset bull market represented by BTC and ETH through the capital channel and asset structure advantages of ETFs to realize asset appreciation. For Web3 native users, buying spot ETFs is essentially a kind of "TradFi mining" to "dig" into the value and potential of traditional markets and assets. For example, users who already hold BTC and ETH in Hong Kong can use the IN-Kind (physical) method to turn the original "alternative assets" into "mainstream assets", which can attract more Web3 native people to stay in Hong Kong.
However, according to Tencent's "Qianwang", not many investors have made physical subscriptions through Shengli Securities in the past few days. Some original investors in the cryptocurrency circle did not rush to deposit funds and place orders after opening an account at Shengli Securities. In addition, the current physical subscription and redemption of Shengli Securities is still not convenient enough by placing orders and confirming by email or phone. It is expected that all parties will further adjust in terms of processes and customer docking in the next stage.