All Hong Kong Spot Bitcoin and Ethereum ETFs Experience Outflows for the First Time

Hong Kong’s Spot Bitcoin and Ethereum ETFs face first total outflows, erasing all initial inflows.
Bitcoin ETFs experienced the largest outflows, particularly due to lower initial funding for Ethereum.
Despite setbacks, analysts remain optimistic about the ETFs’ long-term impact.

The Spot Bitcoin and Ethereum exchange-traded funds (ETFs) which had been approved in Hong Kong in late April and started trading just two weeks ago have experienced outflows across all funds for the first time.

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According to data from Farside, the funds have seen a total outflow for the third time in three consecutive trading days, with Monday being the first day when all six funds returned negative flows.

Bosera HashKey, ChinaAMC and Harvest Global saw a combined US$39m (AU$59m) outflows across their Bitcoin and Ethereum funds, marking an acceleration compared to just US$6m (AU$9m) in outflows the two previous trading days.

HK BTC/ETH ETF flow in million USD, source: farside.co.uk

BTC Outflows Dwarf ETH Outflows

Bitcoin ETFs saw the biggest outflow with US$32.7m (AU$49.5m) compared to Ethereum’s US$6.6m (AU$10m) – in part because the ETH ETFs hadn’t attracted nearly as much in initial funding.

The outflows mean that all inflows since launch have been wiped out, with only seed round money remaining.

Speculations around these ETFs had people guessing that mainland Chinese investors would be able to put money into Ether and Bitcoin funds. However, that turned out not to be the case, amid China’s strict anti-crypto stance.

While the funds are relatively small compared to their US counterparts, the initial volumes were high relative to Hong Kong’s population size.

Analyst Sees Positive Future Despite Early Troubles

Swyftx lead market analyst Pav Hundal told CNA after the launch that he remains optimistic about the funds.

While he acknowledged the initial disappointment with the performance of Hong Kong’s new ETFs, he emphasised that judging their success based solely on early performance is short-sighted.

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He believes the true value of these ETFs lies in their long-term impact on making high-value assets like Bitcoin and Ether more accessible. In his view, these ETFs are strategic components that will bring “broader acceptance and deeper integration of cryptocurrencies into the global financial system” – which will in turn lead to general adoption.

At the time of writing, BTC trades for US$62,529 (AU$94,711), up 2% on the 24-hour timeframe, while ETH is trading just under US$3k (AU$4.5k), in a narrow band it has maintained for some time now.