Hong Kong Bitcoin ETFs Face Strain Amidst US ETF Selling Surge

Crypto News- Reports show the newly minted Hong Kong Bitcoin ETFs are facing an uphill battle against the selling spree triggered by 11 US Bitcoin ETFs. Despite recording a commendable $217 million in net inflows this week, Hong Kong’s offerings pale in comparison to the staggering $298 million outflows witnessed in the US market, as per data from Dune and insights shared by James Butterfill of CoinShares.

Hong Kong Bitcoin ETFs Face Strain Amidst US ETF Selling Surge

The significance of institutional inflows via ETFs in propelling Bitcoin’s rally to record highs cannot be overstated. These ETFs played a pivotal role, contributing to about 75% of new investments as Bitcoin surged past the $50,000 milestone by mid-February, according to CryptoQuant.

However, recent data paints a different picture. Fidelity’s Wise Origin Bitcoin Fund (FBTC) and Grayscale’s GBTC fund notably led the charge in outflows, collectively shedding over $350 million worth of Bitcoin on May 1 alone, per Farside.

Underwhelming Debut: Hong Kong’s Crypto ETFs Fail to Match US Trading Frenzy

The highly anticipated debut of Hong Kong’s Bitcoin and Ether-based ETFs on April 30 sparked enthusiasm within the crypto community. Nonetheless, trading activity fell short of expectations. With a modest $12.4 million in trading volume on the first day, it’s clear that Hong Kong’s market is yet to match the fervor seen in the US, where initial trading volumes reached a staggering $4.6 billion.

Eric Balchunas, a senior Bloomberg ETF analyst, shed light on the discrepancy, emphasizing that Hong Kong’s market size is a mere fraction of the US market’s, thereby contextualizing the figures.

James Wo Foresees Hong Kong ETFs as Catalyst for Asia’s Crypto Adoption

While Hong Kong’s ETF inflows may seem modest, industry experts like James Wo, CEO of DFG, see them as a significant step towards broader crypto adoption in Asia. Wo suggests that such ETFs could potentially fuel long-term price growth as other jurisdictions follow Hong Kong’s lead.

However, Bitcoin’s immediate response to the ETF debut was less optimistic. The “sell-the-news” event triggered a downturn, with Bitcoin slipping below the $60,000 mark on May 1, marking its lowest point since February’s end.

Jag Kooner, head of derivatives at Bitfinex, warns that losing the crucial $59,000 support level, represented by the short-term holder realized price (STH-RP), could pave the way for further decline, potentially revisiting the $50,000 threshold. Despite the uncertainty, industry players remain hopeful that the ETFs’ introduction will pave the way for broader market acceptance and growth.