In a significant development for the recently approved Ethereum ETFs in Hong Kong, the ETF product launched by Chinese fund manager ChinaAMC has seen a significant increase in net inflows, reaching over HK$5 million (US$640,780) as of mid-day Wednesday. 

This surge follows a previous high of HK$3.77 million on Tuesday, marking the largest inflow since the ETF’s launch, while investors are anticipating the approval of similar products in the United States for the market’s second-largest cryptocurrency, which has contributed to the increased interest in these ETFs.

Hong Kong’s Ethereum ETFs Break Trading Records

According to a South China Morning Post report, on Tuesday, the ETF witnessed over 1.28 million shares being traded, surpassing the average daily trading volume of around 500,000 since its launch on April 30.

Meanwhile, this week, the other two spot Ethereum ETFs in Hong Kong, issued by investment firms Harvest Global, Bosera, and HashKey Capital, have also experienced “higher-than-usual” trading volumes. The prices of all three ETFs recorded an increase of over 18 percent on Tuesday.

While Hong Kong’s spot crypto ETFs were hailed as a significant step in the city’s pursuit of becoming a virtual asset hub, their turnover has remained modest on most days since their launch. The trading volume pales compared to spot Bitcoin ETFs in the United States, where the products were approved in January.

By the numbers, SoSo Value data shows that on Tuesday, the total net inflow of Bitcoin Spot ETF was $306 million, marking seven consecutive days of net inflows. 

Grayscale’s ETF, the Grayscale Bitcoin Trust (GBTC), had a single-day net outflow of $0.00, BlackRock’s ETF IBIT had a single-day inflow of $290 million, and the total net asset value of Bitcoin spot ETF was $58.910 billion.

Market Optimism

ETFs are viewed as vital means of attracting mainstream investors to volatile virtual assets, potentially bolstering prices. However, the initial impact of Hong Kong’s ETF launches on the global cryptocurrency market appears to have been relatively muted. 

Analysts at Bloomberg have pointed out that Hong Kong’s ETF market is substantially smaller than that of the United States. Nonetheless, they assert that the city’s spot crypto ETFs, the first in Asia, play a pivotal role in the global adoption and acceptance of virtual assets.

The recent surge in Ethereum ETFs trading volume in Hong Kong coincides with a significant rally in cryptocurrency prices following reports suggesting an increased likelihood of the US Securities and Exchange Commission (SEC) approving spot Ethereum ETFs. 

Bloomberg Intelligence ETF analysts Eric Balchunas and James Seyffart recently raised their estimated probability of approval for Ethereum ETFs in the US from 25 percent to 75 percent, indicating a potential shift in the SEC’s stance on these products.

ETH, the second-largest cryptocurrency by market capitalization, has experienced a price surge of over 20 percent, surpassing US$3,700 this week. The largest cryptocurrency also climbed by approximately 4 percent, surpassing US$71,000.

Featured image from Shutterstock, chart from TradingView.com