Hong Kong, inspired by the success of BTC ETFs in the US, plans to launch the first batch of spot Bitcoin and Ethereum ETFs in a week.
Major fund managers in Hong Kong and China are preparing for the launch of trading on April 30. The event is being closely watched by crypto investors in the region following the successful launch of ETFs in the US, which have attracted $56 billion in inflows since January 2024, according to CoinGape.
Asset managers HashKey Capital and Bosera said Hong Kong's spot crypto ETFs are ready to launch a physical subscription and redemption mechanism. This will allow investors to exchange their assets for shares in the ETFs, which is different from the cash redemption used in the US.
Crypto experts prefer the in-kind approach to buying ETFs because it is more preferable and understandable for crypto investors, market makers, and cryptocurrency exchanges. This method offers greater efficiency and arbitrage opportunities.
According to HashKey, Bosera-HashKey Capital's spot products will be launched on April 30. Previously, Hong Kong had already approved crypto futures ETFs. There are three futures ETFs operating in the region: CSOP Bitcoin Futures, CSOP Ether Futures, and Samsung.
It's worth noting that the total assets of all three funds are around $175 million, which is disproportionately less than in the US. For example, the ProShares Bitcoin Strategy, a US cryptocurrency ETF fund, has $2.5 billion in assets.
Analysts stress that it is important for investors to have realistic expectations about the prospects for the Hong Kong ETF market, especially given the modest size of existing futures ETFs.
Hong Kong is competing with Singapore and Dubai for status as a center for the virtual asset industry, operating under established regulations. Demand for futures ETFs will be an indicator of Hong Kong's progress in this rivalry.
Hong Kong has good potential given the presence of Chinese capital in the city, as well as cryptocurrency exchanges and market makers in the Asia-Pacific region.
Bloomberg Intelligence ETF analyst Rebecca Sin said Hong Kong Bitcoin ETFs are only expected to reach about $1 billion in two years.
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