Hong Kong ETFs Experience Record Outflows


Hong Kong’s Bitcoin and Ethereum ETFs faced substantial net outflows, indicating a notable drop in investor confidence and fund performance. The largest-ever outflow occurred on Monday, May 13, completely erasing all gains made since the ETFs were launched less than two weeks ago.

On May 13, Hong Kong witnessed the largest-ever net outflow from its Bitcoin and Ethereum ETFs, completely nullifying all gains achieved since their inception. The combined net outflow from spot Bitcoin ETF funds managed by Bosera, ChinaAMC, and Harvest Global amounted to $32.7 million. Notably, ChinaAMC’s Bitcoin fund experienced the most significant loss, with outflows totaling $15.5 million.

Hong Kong’s Bitcoin and Ether ETFs Experience Substantial Outflows

Hong Kong’s spot Bitcoin ETFs managed by Bosera, ChinaAMC, and Harvest Global reported a combined net outflow of $32.7 million, with ChinaAMC’s Bitcoin fund bearing the brunt of the loss at $15.5 million, as per Farside Investors data. This significant withdrawal signals a notable shift in investor sentiment, leading to a considerable decline in the funds’ performance.

The outflows from Hong Kong’s crypto ETFs have been consistent since May 9, totaling $52.5 million. Monday’s outflows alone amounted to $20.9 million, surpassing the total inflows of $18.4 million recorded by May 10. This trend indicates a growing lack of confidence in these investment products, likely driven by market volatility.

Spot Ether ETFs from the same issuers experienced total net outflows of $6.6 million, with Harvest Global and ChinaAMC each witnessing $3 million withdrawals from their Ether funds. This decline in Ether ETF investments mirrors the trend observed in Bitcoin ETFs, suggesting a broader shift in investor behavior towards cryptocurrency ETFs in Hong Kong.

The losses in Ether ETFs are noteworthy given their relatively smaller market compared to Bitcoin ETFs. Notably, this marks the first instance of Harvest Global’s Bitcoin ETF experiencing withdrawals, totaling $9.8 million, contrasting sharply with the inflows and gains observed during the initial trading days following their launch on April 30.

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Bitcoin’s Post-Halving Slump Leads to Significant Outflows from ETFs

Impact of Bitcoin’s Price Decline: The recent outflows from Bitcoin ETFs in Hong Kong coincide with Bitcoin trading below $61,000 over the weekend. This drop is attributed to the post-halving slump, where Bitcoin mining rewards were halved on April 20. This scarcity mechanism, inherent in Bitcoin’s blockchain, often triggers a price decline as the market adjusts to the new issuance schedule.

Investor Reaction to Price Dip: Investors have swiftly reacted to the price dip by withdrawing funds from Bitcoin ETFs in anticipation of further declines. Historically, the halving event has influenced Bitcoin’s price, causing temporary drops followed by potential long-term gains. However, the immediate response has been negative, with notable capital outflows from the ETFs.

Comparison with U.S. ETF Market: Hong Kong’s crypto ETF market remains considerably smaller than that of the United States. While the U.S. boasts 11 spot Bitcoin ETFs managing over $50 billion in assets collectively, Hong Kong’s ETFs manage a total of $179.2 million in assets. Bitcoin ETFs dominate the market share with 88.5%, while the remaining portion is allocated to Ether ETFs.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.


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