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Hong Kong's Ethereum, Bitcoin ETFs Seek $500M Success
Key Points
Three Bitcoin and Ether ETFs obtained provisional clearance in Hong Kong.
Bloomberg ETF analyst Eric Balchunas thinks the clearance may not have a big effect.
The Hong Kong Securities and Futures Commission (SFC) conditionally approved three offshore Chinese asset managers to issue spot Bitcoin (BTC) and Ether (ETH) ETFs on April 15.
Harvest Fund, Bosera, and China Asset Management handle these assets.
Analyst Predictions
However, Bloomberg senior ETF analyst Eric Balchunas dismissed these ETFs' possible influence. He said these ETFs would be fortunate to attract $500 million, not $25 billion.
Balchunas defended his projections by pointing out that the Hong Kong ETF market is far smaller than the US. He said that Chinese ordinary investors cannot officially buy these ETFs.
Compare and Challenge
Compared to BlackRock, which manages over $9 trillion, Balchunas said that the three possible ETF issuers are modest.
He also noted that these funds' capital climate is less efficient than elsewhere, therefore costs may be about 1-2%. This is far greater than U.S. market fees.
Despite the scale of the Hong Kong ETF industry, Real Vision chief crypto analyst Jamie Coutts thinks these products might provide Chinese investors with a large pool of funds.
The spot Bitcoin and Ether ETFs were cleared for in-kind debut by the Hong Kong FSC. This mechanism issues new ETF shares directly using Bitcoin and Ether, unlike U.S. spot Bitcoin ETFs, which require cash-create redemption.
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