ETFs
Ether ETFs Jump in Hong Kong Ahead of US Approval for Similar Crypto Products
Spot ether exchange-traded funds (ETFs) launched by Chinese fund manager ChinaAMC recorded more than HK$5 million (US$640,780) in net inflows as of midday on Wednesday, after hitting 3. 77 million Hong Kong dollars on Tuesday, the largest since its launch, as investors expect the United States to approve similar products.
The ETF saw more than 1.28 million shares traded on Tuesday. Most of the time since its launch on April 30, trading has remained around 500,000 shares, according to data from the Hong Kong Stock Exchange. As of Tuesday, net inflows stood at HK$3.77 million.
The other two Hong Kong spot ether ETFs, issued by investment firms Harvest Global, Bosera and HashKey Capital, also saw higher than usual volumes this week. Prices of all three ETFs soared more than 18 percent on Tuesday.
Turnover of Hong Kong’s spot crypto ETFs, despite being hailed as a major milestone in the city’s quest to become a virtual asset hub, has remained meager for most of the time since their launch . Trading volume is minimal compared to that of Bitcoin spot ETFs in the United States, which approved the products in January.
While ETFs are seen as an important way for volatile virtual assets to attract traditional investors, possibly helping to drive up prices, the initial impact of the Hong Kong launches on the broader global cryptocurrency market seemed to be “muted”.
Analysts have pointed out that Hong Kong’s ETF market is significantly smaller than that of the United States and argued that the city’s spot crypto ETFs – the first of their kind in Asia – are important for adoption and global acceptance of virtual assets.
The increase in crypto ETF trading volume in Hong Kong this week came as cryptocurrency prices rose following reports of an increased likelihood that the Securities and Exchange Commission (SEC) US approves ether spot ETFs.
Bloomberg Intelligence ETF analysts Eric Balchunas and James Seyffart on Tuesday raised the estimated probability of approval from 25 percent to 75 percent, suggesting a possible reversal in the SEC’s stance on these products.
The price of ether jumped more than 20 percent to exceed $3,700 this week. Bitcoin also climbed around 4 percent to surpass US$71,000.
The SEC is expected to make a decision on at least one of the ether ETF applications by May 23.