NEW YORK, April 30, 2024 - On Tuesday, Hong Kong became the first in Asia to offer spot bitcoin and ether exchange-traded funds (ETFs) to retail investors, marking a significant milestone in the region's cryptocurrency market. The ETFs were issued by three Chinese firms—China Asset Management, Bosera Asset Management, and Harvest Global Investments—and began trading on the Hong Kong exchange.

Hong Kong's Securities and Futures Commission (SFC) had approved the three ETF providers just two weeks prior. In early trading, the spot bitcoin ETFs by ChinaAMC, Bosera HashKey, and Harvest saw gains of over 3%, but later settled to about 1.5% higher. The three ether ETFs initially traded above 1% but slipped into negative territory by late afternoon.

As of 3:50 a.m. ET, Bitcoin was trading at $63,218, while Ether was at $3,159, according to Coin Metrics data.

Hong Kong as one of the first regions globally to approve an ether ETF, a significant step as the U.S. Securities and Exchange Commission has yet to approve a similar product in the United States, despite allowing bitcoin ETFs earlier in the year.

These crypto ETFs enable investors to gain exposure to cryptocurrency price movements without directly owning the assets. The launch is viewed positively for Hong Kong's markets, providing a regulated avenue for both institutional and retail investors to trade crypto assets, thereby expanding the product offerings on the broader exchange.

Previously, Hong Kong had only allowed crypto futures ETFs, which have been trading on the Hong Kong Exchange (HKEX) since late 2022. Interest in these virtual asset ETFs has grown significantly, with HKEX reporting a combined average daily turnover of HK$51.3 million ($6.6 million) for the three virtual asset futures ETFs in the first quarter of 2024, a substantial increase from HK$8.9 million a year earlier. Additionally, the futures ETFs saw net inflows of HK$529 million during the same period.