Hong Kong Bitcoin ETFs struggle with $264 million AUM

Despite an enthusiastic launch, spot Ethereum (CRYPTO:ETH) and Bitcoin (CRYPTO:BTC) ETFs in Hong Kong have struggled to gain the traction seen in the U.S. market. 

While the combined issuance scale of six virtual asset spot ETFs in Hong Kong reached $248 million during their debut in April, the market’s performance has lagged. 

In comparison, U.S. Bitcoin ETFs launched in January garnered approximately $125 million initially, but now manage a much larger $51.4 billion in assets under management (AUM). 

Based on mid-May data, the total AUM for Hong Kong’s six ETFs stood at HKD 2 billion (around $264 million). 

However, daily trading volumes have seen fluctuations, dropping below HKD 40 million on several occasions, a significant decline from the initial HKD 520 million observed during the launch phase. 

Jason Jiang, a researcher at OKG, points out that the market has shown a downward trend with three spot Bitcoin ETFs experiencing consecutive net outflows. 

According to Jiang, one of the advantages of Hong Kong’s Bitcoin ETFs is their provision for physical redemption, which may attract Bitcoin miners. 

However, miners remain hesitant, with on-chain data showing miner wallet balances at a six-month low. 

Jiang attributes this cautious approach to fee structures in Hong Kong, which may be discouraging miners from actively participating in the ETF market. 

The Ethereum spot ETF has also faced challenges. 

It holds just 15.11% of the market share with an AUM of HKD 327 million. 

The lack of staking support has limited its appeal, as Ethereum holders would forfeit staking rewards by subscribing to the ETF. 

Jiang suggests that future developments, such as the introduction of a proof-of-stake Ethereum ETF, could help attract more investors to the market.

At the time of writing, the Bitcoin price was $64,217.11.