Hong Kong’s spot Bitcoin exchange-traded funds (ETFs) have reached a significant milestone, surpassing 2 billion Hong Kong dollars (approximately $256 million) in assets under management (AUM). However, despite this achievement, these ETFs still trail behind their United States counterparts in attracting both retail and institutional investors.
Current Status of Hong Kong’s Bitcoin ETFs
According to data from SoSo Value, the three spot Bitcoin ETFs in Hong Kong collectively saw a net inflow of around 247 BTC in the past week. This brings their total holdings to approximately 4,450 BTC, with a combined AUM now standing at HK$2.1 billion ($269 million).
Among these, ETFs managed by China Asset Management and Harvest Asset Management, in collaboration with the digital asset trading platform OSL, dominate the market with over HK$1.3 billion ($167 million) in AUM. The third spot Bitcoin ETF, which operates independently of OSL, holds HK$776 million ($99.5 million), representing roughly 42% of the market share.
Comparing Hong Kong and US Bitcoin ETFs
While the growth in AUM is a positive sign, Hong Kong’s Bitcoin ETFs have experienced a slower start compared to the US market. When these ETFs launched on April 30, they attracted $262 million in inflows during their first week, with most of this capital subscribed before the funds were listed. However, actual asset inflows during that period amounted to a modest $14 million—a stark contrast to the billions that poured into US spot Bitcoin ETFs when they debuted in January.
This disparity underscores the challenges Hong Kong faces in positioning itself as a leading hub for cryptocurrency investments. The city’s ETF market currently offers fewer options for gaining exposure to Bitcoin, with only three spot ETFs available compared to 11 in the US.
Future Prospects and Challenges
Bloomberg ETF analyst Rebecca Sin has pointed out that Hong Kong’s in-kind ETF creation model presents a unique opportunity to increase both AUM and trading volume. However, despite these potential advantages, Hong Kong’s Bitcoin ETFs still have a long way to go to match the investor interest and capital inflows seen in the US market.
To compete on a global scale, Hong Kong will need to continue attracting both retail and institutional investors, which could help drive the growth of its Bitcoin ETFs and position the city as a more significant player in the cryptocurrency investment space.
