Hong Kong Becomes a Part of the Crypto ETF Race

The first spot cryptocurrency exchange in Hong Kong has now started trading, in a bid to curtail the growing influence of the US in this market. The division in Hong Kong for three Chinese asset managers launched their own ETFs.

These ETFs are launched by Bosera Asset Management, China Asset Management, and Harvest Global Investments to keep track of the price of Bitcoin and Ethereum. Bosera Funds entered into a partnership with HashKey Capital to launch the ETF.

Hong Kong's Entry in the ETF Race

The rollout by the three Chinese firms is counter to the same products by US companies, including BlackRock and Fidelity Investments earlier this year. The entry of the US firms in this sector caused the price of Bitcoin to reach an all-time high value of $73,000 in March and also attracted billions of dollars in investment.  

The three Bitcoin ETFs from Chinese companies had a closing of 1.5% to 1.8% greater on their debut. On the other hand, the ether ETFs saw a loss of around 0.5% to 0.8%. All in all, the trading turnover for all six ETFs was around HK$99.5mn (US$12.7mn), which also includes the US dollars, Hong Kong dollars, and Renminbi.

Hong Kong's Drive to Enter the Crypto Market 

Hong Kong was once a major financial hub in the region and gained attention from various regional and international players. However, the growing Chinese influence and the restrictions pushed in by the COVID-19 pandemic have tarnished its image. 

As a result, it aims to restore its former glory by tapping into the crypto market. The CSOP Asset Management was the first to offer the first Bitcoin and ether futures ETFs in the Hong Kong market. This was done back in late 2022 when the Securities and Futures Commission published rules for spot ETFs. With China’s largest mainstream asset managers launching crypto-linked funds, there is great excitement in the industry. 

This excitement and curiosity are quite encouraging, despite the efforts by the Chinese government to curtail transactions related to crypto coins. Mainland authorities and state media have continuously issued warnings against trading digital assets, with the government banning crypto trading in late 2021. However, several investors indulge in crypto trading with the help of workarounds such as virtual private networks.

Impact on Crypto Coins Value 

It is too early to predict any change with the launch of ETFs by Chinese firms. However, we can expect to see some changes in the days going forward. In case of an investor or trader wondering what impact the launch of ETFs from Chinese firms will have, it is a story of wait and watch. Carrying out analysis through the Alpha AI trading bot might just help you get a better idea of how the market will change course in the days ahead.

• Next