Hyped Hong Kong Crypto ETFs Launch

Hong Kong’s turn. Trading for Asia’s first spot crypto ETFs began early this morning in Hong Kong, offering investors a regulated avenue to buy instruments linked to both BTC and ETH. It was a historic debut, but how did it perform?

Despite hopes that there would be a flood of capital waiting to ape these newly established instruments given the recent Chinese appetite for gold, mainland investors are unable to purchase these newly established products, limiting their availability to a Hong Kong market that is just 1/168th the size of America’s.

Accordingly, activity for these ETFs disappointed on an absolute scale; the combined $12.8 million in volume for both instruments fell short of the $655 million recorded on the debut of the US spot BTC ETFs and came in below issuer expectations for $100M in volume.

On a relative scale, however, at least some of these Hong Kong ETFs appear successful, with the ChinaAMC BTC ETF recording $123M in inflows and already ranking in the 20th percentile of Hong Kong ETFs by assets under management.

Ethereum demonstrated a momentary bout of strength during the illiquid Saturday trading session, allowing ETH/BTC to break above 0.05, but this morning’s drop hit Ether especially hard and sent the Ratio back below the key level.

While the total crypto market cap excluding BTC and ETH is only down a little over 5% on the week, recent price action has slaughtered broader alts, sending prices on the riskiest of crypto assets to steep deep discounts.

Zeitgeisty AI coins have experienced some of the most pronounced downside, with the tokens of popular projects like Akash, Render, and Bittensor plunging over 20% on the week, infected by accusations from disgraced big pharma executive turned crypto investooor Martin Shkreli that upcoming compute sharing network io.net was falsifying connected GPU data.

Despite a post-mortem from the io.net team that blamed the discrepancy on GPU spoofing to farm upcoming airdrop rewards, the incident appears to have seeded a crisis of confidence about whether user numbers for similar projects are realistic and the value of these protocols.

Newly airdropped tokens have enjoyed strength since Celestia’s drop in October, but the tokens of Renzo and Kamino have plummeted post-launch today, demonstrating the weak nature of crypto markets to close out April.

Risk assets in TradFi and crypto broke below supportive uptrends this month, giving back all of their gains from March. Should prices bounce to regain the trend, it is plausible that they could re-obtain all-time highs within the next month, but a further decline poses the risk that a greater number of market participants will accept that the bull market is on momentary hold, increasing the risk of continuation to the dark side.