Hong Kong’s newly launched spot Bitcoin exchange-traded funds (ETFs) are struggling to match the selling and buying pressure of their United States-based counterparts.
The debut of the first batch of Hong Kong Bitcoin and Ether-based ETFs on April 30 generated excitement among crypto holders. However, trading activity has been disappointing, with the Hong Kong-based spot ETFs amassing only $12.4 million in trading volume on the first day, according to data from the Hong Kong Stock Exchange.
The Hong Kong spot Bitcoin ETFs reportedly have seen net inflows of $217 million this first week of their trading. However, according to Dune Analytics, this falls short of the $298 million worth of net outflows generated by the 11 U.S. spot Bitcoin ETFs in the same period.
meanwhile, Hong Kong has seen US$217m on inflows this week pic.twitter.com/mLZVLzDQFy
— James Butterfill (@jbutterfill) May 2, 2024
The debut of the Hong Kong ETFs seems to have triggered a “sell-the-news” reaction among Bitcoin holders, as BTC fell below the $60,000 mark on May 1, 2024, a level not seen since the end of February, according to CoinMarketCap.
Institutional inflows from ETFs have played a crucial role in Bitcoin’s rally to new all-time highs. By February 15, Bitcoin ETFs accounted for about 75% of new investment in the cryptocurrency as it surpassed the $50,000 mark, according to CryptoQuant research report.
“We estimate over 75% of new investments into Bitcoin are coming from these ETFs. Moreover, investment from these ETFs has increased to 2% of the total historical investment in Bitcoin in just one month as measured by the realized market capitalization,”
the report said.
The U.S. spot Bitcoin ETF market is currently facing a downturn as it appears that investors’ excitement is wearing off. Notably, BlackRock’s iShares Bitcoin Trust (iBIT), which has consistently recorded net inflows since its launch, recorded its first negative net flow during the trading day ending May 1, 2024.
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