Hong Kong’s largest bitcoin futures exchange-traded fund saw its assets under management grow fivefold in the previous five months as local investors chased the rally in the world’s most well-known cryptocurrency.
Hong Kong’s largest bitcoin futures exchange-traded fund saw its assets under management increase fivefold in the last five months to a little over $100 million as local investors pursued the rally in the world’s most well-known cryptocurrency.
Hong Kong has been a latecomer to cryptocurrency trading, having approved its first three cryptocurrency futures ETFs in late 2022.
CSOP Asset Management, which runs the CSOP Bitcoin Futures ETF (3066.HK), said demand increased significantly in February.
The approval and introduction of spot bitcoin ETFs in the United States this year has boosted demand from investors who believe the token’s limited supply will drive values higher, according to Alessandro Zhu, CSOP Asset Management’s crypto product manager and deputy head of fixed income.
Bitcoin’s remarkable outperformance of Hong Kong stocks (.HSI) has also increased demand, he said.
Zhu stated that, while cryptocurrency trading is prohibited in mainland China, offshore Chinese financial institutions may invest in bitcoin ETFs in Hong Kong.
Bitcoin has gained 45% this month alone and was trading over $63,000 on Thursday, approaching its November 2021 record high of $69,000.
Assets under management for the CSOP Ether Futures ETF (3068.HK), which opens a new tab, have also increased, doubling this year.
Volumes have increased.
The average daily turnover for the CSOP Bitcoin Futures ETF this year has surged to $2.8 million, up from $0.97 million last year, putting it on pace with turnover in some Hong Kong property giants such as the Wharf (Holdings) (0004.HK).
Some market insiders expect Hong Kong will authorize the first spot bitcoin ETF this year since policymakers want to establish the city as a virtual asset hub.
“Hong Kong’s bitcoin ETF is showing promising signs with a large number of (spot bitcoin ETF) applications to the Hong Kong Securities and Futures Commission in the past few months,” said Kennix Chan, executive director of Victory Securities.
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