As excitement continues to grow surrounding the introduction of spot Ethereum and Bitcoin ETFs in the United States, Hong Kong has embarked on its journey to create a spot ETF market for these digital assets. But the performance of Hong Kong ETFs has not matched their success in the US, raising questions about the fundamental factors driving this discrepancy.
Hong Kong Bitcoin ETFs Face Struggle Despite Strong IPO
Hong Kong It was launched. The six virtual asset ETFs launched on April 30, initially attracting significant interest with a total issuance volume of $248 million — surpassing the roughly $125 million raised by the U.S. Bitcoin ETF when it launched in January.
However, despite this promising start, subsequent market performance has been less than optimistic. According to a recent study, analysis According to Jason Jiang, a researcher at OKG, as of mid-May, the total assets under management (AUM) of the six Hong Kong-based ETFs amounted to nearly HK$2 billion (about US$264 million).
While this has a significant impact on Hong Kong’s local financial market, it pales in comparison to the US market, where total assets under management in Bitcoin ETFs stand at around $51.4 billion 9 months after their launch.
Market activity also showed signs of slowing down. Total trading volume on the Hong Kong Stock Exchange fell Virtual Asset ETFs Daily trading volume exceeded HK$520 million in the first few weeks. However, daily trading volume has been fluctuating downward, falling below HK$40 million on several occasions.
Moreover, the three Bitcoin ETFs have seen net outflows for four consecutive days, while the Ethereum ETFs have faced similar challenges.
Jiang claims that one of the main advantages of Hong Kong Bitcoin ETFs is that they provide physical redemptionThis feature In theory, this coin should attract both native crypto investors and Bitcoin miners. However, on-chain data suggests that miners are currently reluctant to participate, choosing to watch the market instead.
This cautious approach is reflected in the decline in mining wallet balances, which have reached a six-month low. These problems are compounded by Hong Kong’s challenges with its fee structure, which may discourage miners from investing in the Bitcoin ETF market.
Lack of storage support hampers the appeal of Ethereum ETF
According to Jiang’s analysis, the Ethereum spot ETF also underperformed. With a market share of just 15.11%, Assets under management The Ethereum ETF is valued at around HK$327 million and has struggled to attract investor interest.
Recent developments, such as the Cancun upgrade, have not resulted in the expected surge in on-chain activity, and the lack of participation support for the ETF has reduced its appeal to potential investors.
Without the ability to a classThe reporter notes that existing Ethereum holders may be reluctant to participate, as they would lose out on participation income by subscribing to the ETF.
According to the researcher, several factors could influence the future of the virtual asset ETF market in Hong Kong. Ethereum Spot ETF Approved Based on Proof of Stake The PoS mechanism opens the door for other mainstream public chain tokens, such as Solana, to enter the market.
Additionally, Jiang asserts that digital asset ETFs serve as a bridge that transforms niche digital assets into more mainstream securities. This shift could enable financial institutions to develop derivative products, such as leverage and wealth management tools, that were previously not possible using physical Bitcoin assets alone.
At the time of writing, BTC is trading at $63,100, down 0.3% over the past 24 hours.
Featured image by DALL-E, chart by TradingView.com