The debut of the Hong Kong Bitcoin ETF has sparked various reactions, with some experts describing the initial performance as “extremely disappointing”. However, Han Tongli, the CEO of Harvest Global Investments, believes that these criticisms are motivated by political factors and argues that the potential of the Hong Kong ETFs is more than double that of the US.
The highly anticipated Hong Kong Bitcoin ETFs had a lackluster start on April 30, and on Thursday, May 9, they experienced a second consecutive daily net outflow since their inception. For example, China Asset Management’s ETF saw 80.16 BTC ($5 million) leaving the product on May 9, while Bosera HashKey Bitcoin ETF recorded an outflow of 10 BTC ($629k).
On the same day, the three ETFs had a total trading volume of $2.06 million, down from the $2.67 million witnessed on May 8 and the $9.74 million recorded on April 30. On May 8, the three Bitcoin ETFs also had net inflows of 101.6 BTC ($6 million) and 99.99 BTC ($6.2 million) on May 7.
Considering all of these factors, some market analysts deemed the outcome below expectations and labeled the debut and subsequent performance as “extremely disappointing”. However, Han Tongli, the CEO of Harvest Global Investments, disagrees with these comments and asserts that the potential of the Hong Kong ETFs is more than double that of the US. Interestingly, crypto commentators subjected this statement to critical analysis and observed a significant imbalance. According to data, the six Hong Kong ETFs attracted nearly $13 million on their debut, but this is only 0.3% of the funds attracted by US ETFs.
Despite this “bold statement”, Han Tongli stands by his assertion and argues that, unlike US ETFs, the Hong Kong ETFs allow for in-kind transactions. This means that investors can trade directly using cryptocurrencies.
“We are building a bridge to connect the traditional financial world to the crypto world. The US built a bridge in one direction,” said Han Tongli.
Han Tongli Suggests Hong Kong ETFs Appeal to International Investors
To witness a significant transformation in the ETF ecosystem, Tongli suggests that the Hong Kong ETFs should appeal to international investors who, for personal and obvious reasons, have chosen not to invest in the US. According to him, the ongoing regulatory crackdown and uncertainties surrounding the crypto ecosystem in the US have made many non-Western investors hesitant to get involved. Addressing the issue from a political perspective, Tongli suspects that “Hong Kong’s political status as a special administrative region of China” is the main reason for the “unfounded” criticisms.
“It’s located in China, and we’ve heard many rumors about Hong Kong; many people don’t want to see Hong Kong become more successful,” Tongli added.
Interestingly, this aligns with the comments made by Gabor Gurbacs, the founder of Pointsville, who claims that there is a “heating up” of geopolitical ETF competition.
In comparison, the Spot Bitcoin ETFs in the US have accumulated nearly $53 billion in assets since their launch. On the other hand, Hong Kong’s ETFs have recorded only a fraction of this amount.
Regarding the overall performance, Bloomberg Intelligence ETF analysts James Seyffart and Eric Balchunas advise investors not to expect significant numbers. According to them, the volume needs to be understood within the context of Hong Kong’s market size. Yimei Li, the CEO of China Asset Management, has also explained that the ETFs could be accessible to the Chinese market, where cryptocurrency trading is currently banned, as hinted by Crypto News Flash.