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Hong Kong's First ETFs Underperform Expectations as Bitcoin Falls Below $62K

Hong Kong's Bitcoin and Ether ETFs falter on debut, missing market expectations.

In a disappointing debut, Hong Kong's inaugural Bitcoin and Ether ETFs attracted minimal trading volume, contributing to a sharp 2% drop in Bitcoin prices to just under $62,000 and a 2.8% decline in Ether, as investors showed tepid interest.

Hong Kong ETF Launch Disappoints as Bitcoin and Ether Prices Tumble Amid Low Demand

In a recent report by CoinDesk, Bitcoin (BTC) was under selling pressure during European hours after statistics revealed low demand for Hong Kong's newly listed exchange-traded funds linked to Bitcoin and ether.

According to CoinDesk data, the leading cryptocurrency by market value declined about 2% in 60 minutes, from $63,300 to around $61,000, at 09:00 UTC. The second-largest cryptocurrency, Ether (ETH), fell 2.8% to $3,066.

The six ETFs that began trading in Hong Kong fell far short of expectations. Their total trading volume was only $11 million, a fraction of the anticipated $100 million. Bitcoin ETFs accounted for $8.5 million, with ether ETFs contributing the remainder.

The cumulative volume is much lower than the $655 million first-day total for US-based spot BTC ETFs. Since then, nearly a dozen spot BTC ETFs began trading in the United States on January 11, attracting almost $12 billion in investor funds. However, inflows have recently halted, slowing bitcoin's upward momentum.

Spot ETFs allow investors to gain exposure to cryptocurrencies without owning them. They are considered a preferable alternative to futures-based ETFs, subject to rollover costs.

Hong Kong's Crypto ETFs Launch with Muted Debut Amid Regulatory Differences

The volume of cryptocurrency exchange-traded funds was just over $11 million. Hong Kong's bitcoin (BTC) and ether (ETH) ETFs failed to take off on their trading debut, falling severely short of original expectations.

The six listed crypto ETFs generated $11 million in volume, with bitcoin ETFs accounting for $8.5 million and ether ETFs for $2.5 million. According to local media sources, issuers expected an initial volume of over $100 million.

Ether ETFs are permitted in the Hong Kong market because Chinese regulators are less concerned about Ether's status as a security than their counterparts in the United States.

A US ether ETF will not be listed for some time because the Securities and Exchange Commission (SEC) has not clarified whether ether is a security.

Ether ETFs are also listed on the Toronto Stock Exchange by issuers such as Evolve and Purpose Investment.

On the first day in the United States, overall trading volume reached $655 million. Bitcoin was down more than 1%, trading at about $62,100, according to CoinDesk Indices data.

Photo: Microsoft Bing

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