On April 30, the total trading volume of six virtual asset ETFs in Hong Kong reached HK$87.58 million (US$12 million) on their first day of listing. In contrast, the first-day trading volume of the US Bitcoin ETF on January 10 this year was US$4.6 billion. Despite the large gap in numbers, Hasheky Group Chief Operating Officer Weng Xiaoqi told PANews and other media today that the medium-term capacity of the Hong Kong ETF market is expected to reach 20% of the US ETF market, with an estimated scale of around US$10 billion.
As a new channel for "old money" to enter the virtual asset industry, ETFs are expected to attract more traditional investors into the virtual asset market. At the same time, due to the support for physical subscription and redemption, Bitcoin and Ethereum spot ETFs are expected to bring in more Web3 people, which will also drive the overall growth of the market size.
The first-day trading volume of 6 ETFs was HK$87.58 million
On the first trading day of April 30, Bitcoin spot ETFs from China Asset Management, Bosera HashKey and Harvest Global rose more than 3% at the start, but then narrowed their gains to about 1.5%. In the morning, three Ethereum ETFs rose more than 1% during trading, but fell into negative territory in the late afternoon. In the first two and a half hours of trading, six funds in Hong Kong had a total turnover of nearly HK$50 million.
In the morning, the trading volume of Bitcoin ETFs was close to HK$35 million (about US$4.5 million), among which China Asset Management's ETF had the largest trading volume, with about HK$23 million traded.
In the end, the total trading volume of the six virtual asset ETFs in Hong Kong on the first day of listing reached 87.58 million Hong Kong dollars (12 million US dollars). Among them, the trading volume of China Asset Management Bitcoin ETF (3042 HK) was 37.16 million Hong Kong dollars, and the trading volume of China Asset Management Ethereum ETF (3046 HK) was 12.66 million Hong Kong dollars.
The trading volume of Bosera HashKey Bitcoin ETF (3008 HK) was HK$12.44 million, and 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.
By comparison, on January 10, the first-day trading volume of the US Bitcoin ETF was US$4.6 billion, which was 383 times the first-day trading volume in Hong Kong.
In January this year, the 11 Bitcoin ETFs launched in the United States had a trading volume of more than $4.6 billion on the first day. Among them, Grayscale's GBTC accounted for $2.326 billion, BlackRock's IBIT accounted for $1.035 billion, and Fidelity's FBTC accounted for $712 million. These three ETFs dominated the trading volume.
“Hong Kong Drifters” can be purchased and are expected to attract Web3 people to enter
According to a previous report by PANews, the competition among the three fund companies in Hong Kong on management fee rates is very fierce. Harvest International’s products are exempted from management fees within 6 months of holding, while Bosera International’s products are exempted from management fees within 4 months after issuance. The management fees of the three funds are 30 basis points (Harvest International), 60 basis points (Bosera International) and 99 basis points (Huaxia Fund) respectively.
In addition, on April 30, according to an official tweet from HashKey, non-Hong Kong residents can also subscribe to or purchase Bose HashKey Bitcoin and Ethereum spot ETF products if they meet local regulatory requirements (such as passing customer due diligence).
It is reported that, just like buying stocks in Hong Kong, anyone who is qualified to buy and sell stocks in Hong Kong can participate in the ETF trading. For new customers, they only need to hold a Hong Kong resident identity card, a permanent address in Hong Kong, and a Hong Kong bank account to participate. This means that more than 1.5 million Hong Kong immigrants can also participate in the first batch of 6 virtual asset spot ETF transactions.
Another difference from U.S. cryptocurrency ETFs is that Hong Kong’s ETFs use a so-called “in-kind subscription and redemption” mechanism, which allows investors to buy and sell ETF shares using the relevant cryptocurrency tokens rather than cash. This option should be attractive to investors because token holders “may consider the benefits of holding tokens through an ETF without having to convert to fiat currency first.
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 IN-Kind (physical) to turn the original "alternative assets" into "mainstream assets", which can attract more Web3 native people to stay in Hong Kong.
In terms of physical deposits, PANews learned that Hasheky actively promoted ETF products to major crypto investors before going online. HashKey Exchange also helped Bosera International and HashKey Capital complete the world's first physical subscription of Bitcoin spot ETF and Ethereum spot ETF respectively.
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.
Although the gap between the first-day trading volume and that of the United States was expected, as the head of a Hong Kong institution commented: "The issuance of BTC and ETH spot ETFs in Hong Kong is a challenge to regain the pricing power of crypto assets. Results come second, and stance comes first."
Zhu Haokang, head of digital asset management at China Asset Management (Hong Kong), told PANews the day before trading began that the launch "will enhance Hong Kong's competitiveness as an international financial center." Weng Xiaoqi also believes that the significance of the launch of Hong Kong spot ETFs is not limited to the ETFs themselves. ETFs are also an important symbolic meaning, which means that traditional financial institutions fully embrace virtual assets, and the main point is that a large number of institutions will enter the market. In the future, it is expected that more Chinese and foreign fund companies will enter the market to issue ETFs.
“There’s a bigger game going on here: the launch of these new ETFs puts Hong Kong ahead of Singapore and Dubai, which are also trying to establish themselves as regulatory hubs for digital assets,” as Antoni Trenchev, co-founder of cryptocurrency exchange Nexo, told the outside world.
A new game has begun. Hong Kong has taken the lead and the final outcome remains to be seen.
