For the Hong Kong-based spot Bitcoin ETFs to compete with their US counterparts, they will need to attract more retail and institutional investors.
Hong Kong’s spot Bitcoin exchange-traded funds (ETFs) have surpassed 2 billion Hong Kong dollars (roughly $256 million) in assets under management (AUM).
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The Hong Kong Bitcoin BTC $64,221 ETFs have had a relatively slow start compared to their United States counterparts.
According to data from SoSo Value, the three spot BTC ETFs in Hong Kong experienced a net inflow of approximately 247 BTC in the past week, bringing their total holdings to around 4,450 BTC. The total AUM for the ETFs now stands at around HK$2.1 billion ($269 million).
ETFs from China Asset Management and Harvest Asset Management — operated in partnership with the digital asset trading platform OSL — account for more than HK$1.3 billion ($167 million) in AUM. The third spot Bitcoin ETF, which is unaffiliated with OSL, holds HK$776 million ($99.5 million), representing about 42% of the market.
Hong Kong investors have a narrow range of options to gain exposure to BTC when compared with the 11 offerings in the US market.
A slower start than the US
Despite the recent inflows, Hong Kong’s spot Bitcoin ETFs have underperformed relative to their US counterparts. When the ETFs launched on April 30, they attracted a total of $262 million of inflows in their first week, with the majority of this figure subscribed before the listings went live.
Actual asset inflows during the first week were a modest $14 million, a stark contrast to the billions that flowed into US spot Bitcoin ETFs when they launched in January.
This disparity highlights the challenges Hong Kong faces in positioning itself as a global hub for cryptocurrency investments.
As noted by Bloomberg ETF analyst Rebecca Sin, the city’s in-kind ETF creation model offers a unique opportunity to increase AUM and trading volume. However, Hong Kong has yet to catch up with the US market in terms of investor interest and capital inflows.
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