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Hong Kong spot Bitcoin ETFs only saw $12m in trading volumes on day one, with the launch triggering disappointment in the market after once-high hopes of an upside price catalyst move failed to materialize.
Spot Bitcoin ETF trading was rejected in the United States for over ten years before the Securities and Exchange Commission (SEC) approved the product in January 2024.
Since then, institutional and retail investors have been free to be exposed to the “risky” Bitcoin. The problem is that demand is waning after three months of consistent inflows, weighing negatively on prices.
(BTCUSDT)
BTC traders were banking on Hong Kong spot Bitcoin ETFs for a revival after a series of morale-damaging price drops in the past two weeks.
$12 Million In Spot Bitcoin and Ethereum ETFs Traded
However, things appear to be worse than expected. By the close of today’s trading in the fragrant harbor, the much-anticipated spot Bitcoin and Ethereum ETFs launch in Hong Kong was lukewarm.
Notably, both products saw a combined trading volume of just $12 million, an underwhelming figure that fell short of expectations.
Looking back, this pales compared to the $4.6 billion traded on the first day when spot Bitcoin ETFs launched in the United States. With the deflating volumes, questions about the initial hype surrounding these offerings are now being raised.
Before the launch, ChinaAMC in Hong Kong, one of the issuers, expressed confidence that the launch would be a hit on day one, with projected trading volumes exceeding $125 million.
As it turns out, this optimism is proving unfounded, with actual volume falling deflatingly low.
Hong Kong ETH and Bitcoin ETF launch in 1 picture.
$300 million "anticipated" volume
$11 million actual volumeThis has got to be one of the worst predictions of all time. pic.twitter.com/7WfwzSylTE
— WhalePanda (@WhalePanda) April 30, 2024
The lukewarm reception could be because the product is only accessible to Hong Kong residents with permits, not mainland China investors – limiting exposure.
Despite the underwhelming start, industry leaders remain optimistic about the future of Hong Kong’s crypto ETFs.
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Issuers Optimistic: Why are Hong Kong’s Spot Bitcoin ETFs Special?
In an interview on April 29, Howard Chu, the Head of Digital Asset Management at ChinaAMC in Hong Kong, said their products were unique.
For instance, Chu said they offered spot and physical subscription and redemption options. These features are not available for spot Bitcoin ETFs investors in the United States.
By providing a physical subscription method, investors, especially mining farms, can directly use their BTC stash to purchase ETFs. As such, this feature makes the product more accessible.
From a security perspective, OSL, the custodian for the ETFs, has tight anti-money laundering (AML) protocols for physical subscriptions.
Before any transactions can be made, interested parties must undergo verification and comply with regulatory requirements. The custodian also requires customer information sharing from the originating exchange.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
