The debut of the Hong Kong Bitcoin ETF has sparked various reactions, with some experts expressing disappointment with its performance. However, Han Tongli, the CEO of Harvest Global Investments, believes that these criticisms are driven by political motives 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 disappointing 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, which was lower than the $2.67 million seen on May 8 and the $9.74 million recorded on April 30. On May 8, the three Bitcoin ETFs also saw net inflows of 101.6 BTC ($6 million) and 99.99 BTC ($6.2 million) on May 7.
Taking all of this into account, some market analysts deemed the outcome below expectations and criticized the debut and subsequent performance as “terribly disappointing”. However, Han Tongli, the CEO of Harvest Global Investments, disagrees with these comments and argues that the potential of the Hong Kong ETFs is more than twice that of the US. This claim was subjected to critical scrutiny by crypto commentators who noted 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 drawn by US ETFs.
Despite these criticisms, Han Tongli stands by his statement and argues that unlike US ETFs, Hong Kong ETFs allow in-kind transactions, meaning investors can trade directly using cryptocurrencies.
Han Tongli suggests that the Hong Kong ETFs should appeal to international investors who have chosen not to invest in the US due to ongoing regulatory crackdowns and uncertainties in the crypto ecosystem. He suspects that the “unfounded” criticisms are driven by Hong Kong’s political status as a special administrative region of China. Tongli believes that some people do not want to see Hong Kong become more successful.
These comments align with the views of Gabor Gurbacs, the founder of Pointsville, who claims that there is increasing competition in the geopolitical ETF space.
In comparison, the Spot Bitcoin ETFs in the US have gathered nearly $53 billion in assets since their launch, while the Hong Kong ETFs have only achieved a fraction of this amount.
Bloomberg Intelligence ETF analysts James Seyffart and Eric Balchunas advise investors not to expect significant numbers in terms of performance. They argue that the trading volume needs to be understood in the context of Hong Kong’s market size. Yimei Li, the CEO of China Asset Management, also explains that the ETFs could be accessible to the Chinese market, where crypto trading is currently banned, as suggested by Crypto News Flash.
