Hong Kong crypto ETFs sell poorly despite regulatory clarity

According to a report published by the Hong Kong Stock Exchange (HKSE), the average daily trading volume for two Bitcoin exchange-traded funds (ETFs) and one Ether ETF listed on the HKSE between December 16, 2022, and February 7, 2023, was $9.30 million Hong Kong dollars ($1.19 million).

As the first region in Asia to offer such access to crypto ETF products, Hong Kong exchange operators lauded regulator clarity for its contribution to “seizing opportunities for virtual asset development.”

When viewed in a global context, the statistics, however, appear somewhat tepid. On April 17, it was reported that the daily average notional value of Bitcoin and Ether futures and options listed by the CME Group in the United States surpassed $3 billion.

Similarly,the average daily volume of the NYSE Arca-listed ProShares Bitcoin Strategy ETF is approximately $196 million.

Unlike Hong Kong, the United States lacks regulatory clarity regarding cryptocurrency ETFs. While the U.S. Securities and Exchange Commission has approved futures-based Bitcoin ETFs, such as the ProShares Bitcoin ETF, it has denied the conversion of Grayscale Bitcoin Investment Trust (GBTC), the country’s largest over-the-counter Bitcoin fund, to a listed spot ETF.

Similarly, the Commission denied Ark Investment Management’s ARK21 Shares Bitcoin ETF’s listing application.

The HKSE report includes the Samsung Bitcoin Futures Active ETF, which was developed by the investment management arm of the South Korean conglomerate.

The product is designed to meet the requirements of institutional investors in the Asia-Pacific time zone who wish to trade bitcoin futures.