The Rise of Bitcoin Spot ETFs: Trends in Hong Kong and the US
After a successful first-day trade of Bitcoin Spot ETFs in Hong Kong, renowned Bloomberg Intelligence expert Eric Balchunas provides insights into the historical introduction of these products in the country.
Hong Kong’s Bitcoin Spot ETFs Attract Notable Inflows
On Tuesday, Balchunas described Hong Kong’s Spot Bitcoin ETFs as a market with immense potential, despite being a fraction of the size of funds in the United States. He noted that the debut of HK spot ETFs coincided perfectly with a US market slowdown, leading to significant inflows that offset negative flows in the US.
With considerable inflows observed on the first day, the Human and Machine channel highlighted that Hong Kong’s Bitcoin and Ethereum Spot ETFs raised over HK$11.2 million, counteracting net outflows from the US market.
Responding to the channel’s post, Balchunas mentioned that his team released a memo providing comprehensive data on HK’s spot ETFs. He initially projected a $1 billion inflow in two years but was surprised by the $292 million in assets on day one. This unexpected influx could accelerate growth plans if sustained, much like the corrections seen in the US market.
During the first day of trading, Ethereum spot ETFs captured 15% of the market share, with investors showing a preference for larger funds over lower fees. Notably, the ChinaAMC BTC spot ETF (3042 HK) attracted the highest inflow of $124 million, despite having higher fees. Other funds like the Harvest Bitcoin Spot ETF (3439 HK) and Bosera Hashkey Bitcoin ETF (3008 HK) also saw substantial net inflows.
However, Balchunas’ analysis sparked confusion among some community members, prompting discussions on the volume calculation methodology and seed money contributions.
The Funds See Massive Outflows in the US
Meanwhile, the US market witnessed significant outflows exceeding $500 million in a single day. Wednesday marked the fastest selloff of US BTC spot ETFs, with a net outflow of $563.7 million, according to data from Farside Investors. Notably, Fidelity Wise Origin Bitcoin Fund (FBTC) and Grayscale Bitcoin Trust ETF (GBTC) experienced substantial withdrawals.
Interestingly, Blackrock iShares Bitcoin Trust (IBIT) faced its first day of outflows since inception, with investors withdrawing $36.9 million. This trend signifies a shift in investor sentiment and liquidity preferences within the US market.
As the trends unfold in both Hong Kong and the US, the landscape of Bitcoin Spot ETFs continues to evolve, attracting attention from investors worldwide.