Local media reports indicate that around 10 financial institutions in Hong Kong have plans to apply for Bitcoin spot ETF listings. Additionally, Ethereum spot ETFs are under active discussion as the region aims to enhance its position in the global crypto market.
This news comes about two months after the first Bitcoin spot ETFs launched in the United States to overwhelming demand. Those products have seen over $6 billion in net inflows, with total assets under management exceeding $50 billion.
While Hong Kong opened applications for Bitcoin spot ETFs in late December, no related products have hit the market yet. Some insiders suggest this lack of Asian crypto ETFs puts regional investors at risk of being “carried” by U.S. capital inflows. They hope Hong Kong can rapidly launch spot ETFs, derivatives, and other trading products.
Ethereum ETF: A Game Changer for Hong Kong
Significantly, sources reveal intensive preparation around an Ethereum spot ETF for Hong Kong. If this product can launch before a similar U.S. offering, it could propel Hong Kong from a follower to a leader in the crypto space.
The success of the U.S. Bitcoin ETFs is clear, with cumulative net inflows reaching $2.24 billion last week alone. This demand drove Bitcoin prices to new highs above $70,000 on Friday. The top three ETFs – GBTC, IBIT, and FBTC – now manage over $27 billion, $12 billion, and $8 billion in assets respectively.
Riding Bitcoin’s momentum, Hong Kong’s two Bitcoin futures ETFs also hit new highs recently. The Southern Bitcoin ETF (3066) peaked at HK$27.5, up 2.5x from its listing price. The Samsung Bitcoin ETF (3135) reached HK$26.8, over double its IPO level.
Weng Xiaoqi, CEO of HashKey Exchange, commented on the importance of Hong Kong establishing crypto ETF products. He noted the rapid growth is largely driven by U.S. institutions, leaving Asian investors to potentially “lift the sedan chair” by buying in later at higher prices.
HashKey is working to list Hong Kong spot ETFs and derivatives as soon as possible. Weng believes having these products will attract substantial capital inflows, establishing Hong Kong as a premier crypto gateway in Asia.
While awaiting regulatory approval, Weng expects the first batch of Hong Kong Bitcoin ETF listings may number below the 11 approved in the U.S. He stressed that an Ethereum spot ETF launch ahead of the U.S. could be transformative for Hong Kong’s crypto market status. Nevertheless, the ability to promote these innovative products early could significantly enhance the region’s position in digital assets.
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