Hong Kong ETFs fail to offset US selling pressure with net inflows, stocks drop over 7% on 5/2
The recent launch of Bitcoin and Ethereum ETFs in Hong Kong has attracted widespread attention. Despite the initial excitement, these new additions seem insufficient to offset the selling pressure from US ETFs.
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Hong Kong’s trading volume is much lower than the US
Hong Kong ETFs have a smaller inflow impact
Industry hopes for emulation in other countries
The debut of Hong Kong’s spot Bitcoin ETF was overshadowed by significant selling activity from similar funds in the US.
On the first day of trading for Hong Kong ETFs, including BTC and ETF, the trading volume was only slightly over 12 million US dollars, which is insignificant compared to the 4.6 billion US dollars on the first day of US ETFs, reflecting the smaller scale of the Hong Kong market. On May 2nd, the trading volume was 33.14 million Hong Kong dollars (4.24 million US dollars), and both stock prices fell by more than 7%.
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(There is a huge gap between the trading volume of Hong Kong’s cryptocurrency ETF and the US, with Huaxia Fund having the highest market share among the six ETFs)
CoinShares Researcher
The net inflow of ETFs can be inferred from the net asset inflow of the Hong Kong Stock Exchange in the past week, which amounted to 217 million US dollars.
Just on April 30th and May 1st, US ETFs saw outflows of 160 million US dollars and 560 million US dollars, respectively.
Market analysts believe that although Hong Kong’s ETFs represent a critical moment, their current impact is limited. Industry insiders hope for the peripheral influence: James Wo, CEO of DFG, stated that because other Asian markets may follow Hong Kong’s lead, these ETFs may promote long-term price increases.
Although Hong Kong’s entry into the cryptocurrency ETF market is of historical significance, its immediate effects have not been as transformative as some people had hoped. The continued dominance of US ETFs and the inherent volatility of the cryptocurrency market suggest that the community should balance their expectations with cautious optimism. As the global financial technology landscape continues to evolve, these diverse market interactions will undoubtedly play a crucial role in shaping the future trajectory of cryptocurrency prices.
ETF
US
Hong Kong
Further reading
FED Research on Central Bank Digital Currencies (CBDC): Will CBDCs Affect the Position of the US Dollar? What Kind of CBDC Will Succeed?
Stablecoin Bill on the Fast Track! US Treasury Secretary Yellen: Regulatory Oversight of Stablecoin Issuers Should Be Strengthened, Establishing Federal Standards
