Hong Kong Bitcoin, Ethereum ETFs expected to outperform US counterparts’ volume on day 1

As Hong Kong braces for the debut of its first spot Bitcoin and Ethereum ETFs, expectations are soaring that the initial trading volumes will eclipse those witnessed during similar launches in the US, local media reported on April 29.

Huaxia Fund Management (Hong Kong), along with digital asset service provider OSL, are spearheading the launch of these ETFs, which are set to go live on the Hong Kong Stock Exchange on April 30.

During a press briefing held on the eve of the launch, Huaxia’s head of digital assets, Zhu Haokang, expressed robust confidence in the ETFs’ potential, projecting that the trading volume could surpass $125 million day one volume recorded by the spot Bitcoin ETFs launched in the US in January.

Zhu said that the funds had seen strong pre-launch interest, which is further bolstered by the ETFs offering options for both cash and physical redemptions, which are not available in the US market. Additionally,

Zhu said:

“We anticipate setting a new record for a crypto ETF debut in Hong Kong.”

Meanwhile,

Wayne Huang from OSL detailed the operational readiness, emphasizing that substantial funds had already been mobilized in anticipation of the launch. He added that the pre-market transactions suggest strong demand that is expected to continue into the first day of official trading.

The ETFs, which are the first in Asia to offer spot trading of Bitcoin and Ethereum directly through an exchange, aim to attract both local and international investors by offering more flexible investment mechanisms compared to their US counterparts.

The launch is seen as a pivotal moment for Hong Kong’s digital assets market, positioning the city as a leading global financial hub in the burgeoning sector of digital assets. Both Huaxia and OSL highlighted the regulatory clarity and innovative trading features of their products as key factors expected to drive their success and appeal to a diverse investor base, including those from regions without existing crypto ETFs, such as Singapore and the Middle East.

Meanwhile, some analysts recently predicted that the Hong Kong-based Bitcoin ETFs are unlikely to see more than $1 billion in total inflows during the first year based on the size of the market and the fact that mainland Chinese investors will not be allowed to engage with them.