On Tuesday, April 30th, 6 new Bitcoin spot ETFs were launched in Hong Kong, opening up the possibility of regulated cryptocurrency trading to all citizens of the autonomous territory in Southeast China.
At debut these particular investment products, launched by 3 different issuers, have totaled inflows of 292 million dollars, reaching almost half compared to what was recorded by Bitcoin ETFs in the USA on the first day of trading.
However, the trading volumes remained at only 12 million dollars, questioning their influence on the cryptocurrency market.
Let’s see all the details below.
Summary
Bitcoin ETF in Hong Kong: great capital flows on the first day, but volumes remain low
With the data in hand, the debut of Bitcoin spot ETFs in Hong Kong on Tuesday, April 30th was unexpectedly successful, with capital inflows reaching $292 million.
Despite the broader market of ETFs in Hong Kong being relatively small, with an AUM of 50 billion dollars, on the first day of trading the inflows were almost half compared to those recorded in the launch of the same product in the USA, where however the market size of ETFs is significantly larger and stands at 9000 billion dollars.
China Asset Management alone has attracted 1.1 billion HK dollars, valued at 140 million dollars, signaling strong interest from investors.
Already at noon, 3 out of the 6 ETFs launched in the Chinese special administrative region have recorded gains of about 2.6%, while BTC was losing 5% in the crypto market.
Ethereum ETFs have remained relatively stable, with no significant price changes.
Despite the remarkable result of the Bitcoin ETFs in Hong Kong, which generated significant capital inflows on the first day, it is worth noting how the trading volumes instead deeply disappointed expectations.
Altogether, the volume of the six new crypto ETFs (including those on ETH) at the closing bell of the first day was 87.58 million HK, equivalent to 12.4 million dollars.
This number is far lower compared to the trading volume on the first day of US Bitcoin spot ETFs.
However, it must be said that in the United States, at the launch of these investment products, the “seed capital” is also counted as volume, while in Hong Kong it is considered as a capital inflow.
The China Asset Management (CAM) Bitcoin ETF has by far been the most watched by investors, with a trading volume of 4.6 million dollars, while Harvest Bitcoin ETF has recorded transactions for 2.2 million dollars.
Finishing on the podium Bosera Haskey Bitcoin EF with 1.5 million dollars in exchange.
These numbers are not particularly encouraging for the future and make us think that Eastern stock exchange ETFs will not have such a significant impact on Bitcoin’s price action in the short term and that inflows will also decrease in the coming days.
However, in the long run they will certainly contribute to elevate the cryptocurrency as an investment asset, potentially reducing the circulating supply in the markets.
The South China Morning Post has reported that fund managers and local brokers in Hong Kong are trying to attract new investors, offering fee exemptions for the new crypto ETFs.
Specifically, Harvest offers a waiver of management fees for six months, while Borsera offers it for four months.
Bitcoin returns to 64,000 USD and rekindles the bulls’ spirits
While Bitcoin ETFs in Hong Kong are generating good capital inflows despite insignificant volumes, the underlying cryptocurrency is struggling to maintain a bullish price structure and continue the bull market.
The debut of these investment tools in the Chinese administrative region may have marked the low of the retracement that was taking place in the past few days on the crypto exchanges, which had brought Bitcoin from $72,000 down to $56,500.
Today, however, after a positive weekend for the demand reaction, the currency managed to return to 64,000 USD, reopening the possibility of resuming a bullish rally.
Unfortunately, the volumes are not particularly encouraging and could suggest the possibility of a rejection by the supply in the near future.
Now all eyes are on 67,500 USD, whose breakout could trigger a bullish squeeze given the billion-dollar short liquidations that would kick in at this price threshold.
It is worth noting within this context how on Friday, May 3rd, Bitcoin ETFs in the USA recorded inflows of $378 million according to Farside Investors data.
The positive data comes after 7 consecutive days of outflows totaling $1.22 billion withdrawn from US cryptocurrency exchanges.
Since their launch, US ETFs have totaled inflows of $11.5 billion, despite Grayscale alone liquidating over $17.4 billion in BTC positions.
Monitoring the performance of ETFs in Hong Kong and comparing them to those in the United States will be crucial in the coming months to evaluate how these dynamics impact the price action of Bitcoin and to make medium-term forecasts.
