Hong Kong Bitcoin ETF – Two Weeks of Inflow Wiped Out

NAIROBI (Coinchapter.com) – On May 13, Hong Kong Bitcoin and Ether ETFs witnessed unprecedented net outflows, totaling $39 million. This significant movement followed Bitcoin’s price drop below $61,000 on Friday. The outflows wiped out two weeks of gains since the ETFs’ launch on May 2.

Source: X

Bosera, ChinaAMC, and Harvest Global’s Bitcoin ETFs were hit the hardest. They saw net outflows of $32.7 million. ChinaAMC’s Bitcoin fund experienced the largest single outflow, losing $15.5 million. The spot Ether ETFs from the same issuers faced combined outflows of $6.6 million. Harvest Global and ChinaAMC each saw $3 million in outflows from their Ether ETFs.

Impact on Hong Kong’s Crypto Market

Monday’s outflows marked the third consecutive trading day of negative flows for Hong Kong’s crypto ETFs. Since May 9, total withdrawals reached $52.5 million. This was the first instance of Harvest Global’s Bitcoin ETF experiencing outflows, totaling $9.8 million.

Hong Kong BTC and ETH ETF flows. Source: Farside Investors
Hong Kong BTC and ETH ETF flows. Source: Farside Investors

Bitcoin’s dip below $61,000, which many attribute to a post-halving slump, preceded these developments. On April 20, the Bitcoin network halved Bitcoin mining rewards, a built-in scarcity mechanism. This halving usually results in a temporary price drop as the market adjusts to the new issuance schedule.

The scale of outflows highlights the volatility and risk inherent in the cryptocurrency market. Despite the significant outflows, the impact on the broader market remains to be seen. The crypto ETF market in Hong Kong is relatively small compared to the United States.

Hong Kong Bitcoin ETFs -Outflows Overshadow Early Gains

Moreover, ChinaAMC’s Bitcoin fund was the biggest loser, recording outflows of $15.5 million. Bosera and Harvest Global’s spot Bitcoin ETFs also saw significant net outflows totaling $32.7 million. The situation was no different for the Ether ETFs, with Harvest Global and ChinaAMC’s funds each experiencing $3 million in outflows.

As of Monday, all crypto ETFs collectively faced $20.9 million in total net outflows, outpacing the $18.4 million in total inflows accumulated since their launch on April 30th.

Comparison with U.S. Crypto ETF Market

Notably, Hong Kong’s crypto ETF market, though growing, is still small in comparison to the U.S. market. In the U.S., eleven spot Bitcoin ETFs manage over $50 billion in assets. In contrast, Hong Kong’s ETFs have a combined $179.2 million in assets under management. Of this, 88.5% is allocated to Bitcoin ETFs, with the remaining portion in Ether ETFs.

Certainly, this disparity highlights the differing scales and levels of adoption between the two markets. The recent outflows in Hong Kong underscore the market’s vulnerability and the challenges it faces in establishing stability and investor confidence.

In conclusion, the significant outflows from Hong Kong’s Bitcoin and Ether ETFs on May 13 have wiped out two weeks of inflows. This event underscores the volatility in the cryptocurrency market and the challenges faced by emerging markets in establishing stable and robust investment vehicles.

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