Record Inflows for Hong Kong’s Ethereum ETFs: A Sign of Growing Crypto Interest?
In a substantial development for the recently approved Ethereum ETFs in Hong Kong, the ETF product launched by Chinese fund manager ChinaAMC has witnessed a notable increase in net inflows, exceeding HK$5 million (US$640,780) as of mid-day Wednesday.
This surge follows a prior peak of HK$3.77 million on Tuesday, marking the largest inflow since the ETF’s launch. Investors are eagerly anticipating the approval of similar products in the United States for the market’s second-largest cryptocurrency, contributing to the heightened interest in these ETFs.
Breaking Trading Records in Hong Kong
As reported by the South China Morning Post, on Tuesday, the ETF saw over 1.28 million shares traded, surpassing the average daily trading volume of approximately 500,000 since its inception on April 30. Additionally, this week, the remaining two spot Ethereum ETFs in Hong Kong, issued by investment firms Harvest Global, Bosera, and HashKey Capital, have also experienced “higher-than-usual” trading volumes.
- The prices of all three ETFs recorded an increase of over 18 percent on Tuesday.
Comparison with Bitcoin ETFs
Despite being praised as a significant milestone in Hong Kong’s journey to establish itself as a virtual asset hub, the city’s spot crypto ETFs have shown modest turnover on most days post-launch. The trading volume significantly lags compared to spot Bitcoin ETFs in the United States, approved earlier this year.
- On Tuesday, data from SoSo Value revealed that the total net inflow of Bitcoin Spot ETF was $306 million, marking seven consecutive days of net inflows.
- Grayscale’s ETF, the Grayscale Bitcoin Trust (GBTC), experienced a single-day net outflow of $0.00.
Market Outlook
ETFs are seen as essential tools to attract mainstream investors to volatile digital assets, potentially boosting prices. However, the initial impact of Hong Kong’s ETF launches on the global crypto market appears relatively subdued. Analysts at Bloomberg noted that Hong Kong’s ETF market is significantly smaller than the US market, but emphasized the pivotal role of the city’s spot crypto ETFs in global adoption and acceptance of virtual assets.
- The recent surge in Ethereum ETFs trading volume in Hong Kong corresponds with a significant rally in cryptocurrency prices, coinciding with reports hinting at the SEC’s approval of spot Ethereum ETFs.
Optimistic Trends
Bloomberg Intelligence ETF analysts Eric Balchunas and James Seyffart have elevated their estimated probability of approval for Ethereum ETFs in the US from 25 percent to 75 percent, signaling a potential shift in the SEC’s stance on these products. The surge in prices of ETH and BTC further reinforces the positive sentiment in the market.
- ETH has seen a price surge of over 20 percent, surpassing US$3,700 this week.
- Bitcoin also climbed approximately 4 percent, exceeding US$71,000.
Hot Take: Is Crypto ETFs the Next Big Thing?
The recent record inflows in Hong Kong’s Ethereum ETFs indicate a growing interest in digital assets, as investors eagerly await regulatory approvals in other markets. With the surge in trading volumes and positive price movements, the potential approval of Ethereum ETFs in the US could further fuel market optimism and mainstream adoption of cryptocurrencies.
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