The Hong Kong-listed cryptocurrency ETF will be “lucky” if they manage to attract a total of $500 million. This was stated by Bloomberg analyst Eric Balchunas.

Latest on HK spot Bitcoin ETFs: They have been approved to exist but not launch (yet). Rumor has it launching next wk so to not compete w Dubai conf. Don’t expect a lot of flows (I saw one estimate of $25b that’s insane). We think they’ll be lucky to get $500m. Here’s why:
1. HK…

— Eric Balchunas (@EricBalchunas) April 15, 2024

The expert clarified that the mentioned figure covers both Bitcoin and Ethereum-based exchange-traded funds.

On April 15, the Securities and Futures Commission of Hong Kong approved both types of instruments. Registration was obtained by products from Boshi International, HashKey Capital, China Asset Management, and Harvest Investment.

According to Balchunas, the ETF market in Hong Kong is like “child’s play” compared to the much larger American segment. It is “tiny” (with AUM of only $50 billion) and does not provide official access to residents of mainland China.

In the US, the daily volume of Bitcoin-based exchange-traded funds has exceeded $200 billion, and instruments from BlackRock and Fidelity have collectively attracted around $30 billion.

“Don’t expect big flows,” warned the specialist.

The analyst called the projected $25 billion from Matrixport “insane.”

Balchunas emphasized that his sentiments should not be seen as bearish.

“This is all certainly positive for Bitcoin as it opens up more investment opportunities, but I’m just saying it’s child’s play compared to the American market. The underlying ecosystem is less liquid/efficient,” he explained.

The analyst forecasted that cryptocurrency ETFs in Hong Kong will exhibit:

• wide spreads;
• deviations from NAV;
• high fees.

The latter parameter could be 1-2% compared to 0.25% in the US.

According to the chairman of the board and CEO of OSL, Patrick Pan, spot Bitcoin ETFs in Hong Kong will launch at the end of April, provided there is “smooth” interaction with the regulator. The company acts as a sub-custodian and provider of infrastructure services for two ETF issuers.

According to the top manager, initially a product based on digital gold will be launched, followed shortly by an Ethereum-based counterpart.

“All parties are working quickly to finalize the process. Specific dates remain unconfirmed at this time,” stated the top manager.

Recall that in November 2023, ForkLog reported that the SFC was considering providing retail investors access to spot Bitcoin ETFs.

Later, local legislator Johnny Ng Kit-chong stated the need for the jurisdiction to “take the initiative” in implementing crypto funds.