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Hong Kong's debut of Bitcoin and Ether exchange-traded funds (ETFs) faced a tough start on their first day of trading, with volumes falling far below the record-breaking figures seen in the United States earlier in January 2024. Tough act to followThe launch of six spot Bitcoin and Ether ETFs, managed by prominent firms including China Asset Management, Harvest Global, Bosera and HashKey, marked a significant milestone for Hong Kong's cryptocurrency market. However, initial trading volumes indicated a notable contrast with the groundbreaking volumes witnessed during the debut of spot Bitcoin ETFs in the United States. On their inaugural day, the total trading volume of the six new crypto ETFs in Hong Kong amounted to 87.58 million Hong Kong dollars ($12 million). This figure, while significant, paled in comparison to the $4.6 billion trading volume recorded for U.S. spot Bitcoin ETFs on their first day, making the U.S. investment funds a tough act to follow. Despite the disparity, industry experts like Justin d'Anethan, head of APAC business development at crypto market maker Keyrock, viewed the Hong Kong ETFs' performance positively within the local market context.Photo by Simon Zhu on UnsplashAbsence of stakingD'Anethan told The Block that while the trading volume in Hong Kong didn't match the U.S. debut, it reflected a noteworthy level of investor interest, particularly considering the market dynamics in Hong Kong, which lacks access to mainland China investors. Bloomberg ETF Analyst Eric Balchunas suggested on X that people expected too much and that in reality, it was a good first day’s trading. In an interview with Bloomberg, China Asset Management CEO Yimei Li stated that the products open the door “for a lot of RMB holders.” They didn’t show up on day one as d’Anethan pointed out, and he further noted that the absence of staking rewards for Hong Kong's spot Ether ETFs was a notable factor affecting investor decisions. Data from the Hong Kong Stock Exchange (HKEX) cited by Cointelegraph illustrated the relatively subdued performance of the newly launched ETFs. Among them, the Bosera HashKey Bitcoin ETF and Ether ETF recorded modest trading volumes, while the China Asset Management (CAM) Bitcoin ETF demonstrated stronger traction, attracting significant trading volume by the closing bell. Prior to trading, CAM's subscription size for its spot Bitcoin and Ether ETFs drew substantial interest, totaling $140 million during the initial offering period. This heightened anticipation was further fueled by the success of HKEX's cryptocurrency futures ETFs, which garnered $529 million in net inflows in the first quarter of 2024. Fee exemptionsIn an effort to stimulate investor participation, local fund managers and brokerages in Hong Kong offered fee exemptions for the new crypto ETFs. Harvest waived its management fee for six months, while Bosera extended a fee waiver period of four months. Despite the optimism surrounding the launch, potential access to the ETFs by mainland Chinese investors remains uncertain, subject to Know Your Customer (KYC) policies. Meanwhile, the Securities and Exchange Commission's (SEC) stance on Ether ETFs in the U.S. complicates the prospects of listing such products in the near future. While Hong Kong's debut of Bitcoin and Ether ETFs faced challenges in matching the fervor witnessed in the U.S., it nevertheless represents a significant step forward for the region's cryptocurrency market, signaling growing interest and participation in digital asset investments.

The launch of Hong Kong's inaugural spot crypto exchange-traded funds (ETFs) is expected to occur by mid-2024, according to one of Hong Kong’s leading crypto executives. Gary Tiu, the executive director and head of regulatory affairs at OSL, a licensed cryptocurrency exchange based in Hong Kong, made that assertion in discussion with The Hong Kong Economic Journal. Tiu provided the publication with insights into the accelerating pace of negotiations between cryptocurrency exchanges and fund companies in the region.Photo by Stella P on UnsplashUp to ten firms contemplating ETF launchOSL is actively engaged in discussions with multiple fund companies, with five to ten firms contemplating the introduction of spot crypto ETFs. Tiu revealed that certain firms have made notable progress, raising the possibility of the debut of these ETFs in Hong Kong by the middle of the year. Additionally, the OSL executive emphasized the significance of maintaining reasonable fees in collaborations between OSL and fund companies, given the limited presence of licensed crypto exchanges in the city – a total of two at present. This suggestion from Tiu aligns with similar recent soundings emanating from HashKey, another licensed crypto exchange in Hong Kong, which recently disclosed its ongoing discussions with asset managers exploring the potential launch of spot crypto ETFs. Livio Weng, the CEO of HashKey, indicated that approximately ten fund companies are considering the introduction of such ETFs in the city. VSFG’s ETF plansAligned with Tiu’s thoughts on the matter, according to a Bloomberg report last week, Venture Smart Financial Holdings Ltd (VSFG), a Hong Kong-based financial services firm, expressed plans to potentially launch a spot bitcoin ETF within the first quarter of this year. Bloomberg reported the company's goal of growing the ETF's assets under management to $500 million by the end of 2024. The regulatory landscape in Hong Kong is actively adapting to accommodate spot crypto ETFs, with the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) announcing in December that they have reviewed their existing policies. Two circulars were published, outlining the requirements for spot crypto ETFs, with the SFC stressing that transactions should be conducted through SFC-licensed crypto platforms or authorized financial institutions. Currently, Hong Kong has listed several futures-based crypto ETFs, including the Samsung Bitcoin Futures Active ETF, CSOP Bitcoin Futures ETF and CSOP Ether Futures ETF. Hong Kong venue for Bitcoin conferenceIn a related development, local lawmaker Johnny Ng revealed on social media on Monday that Hong Kong will host The Bitcoin Conference this year. Earlier this month Ng urged the local administration in Hong Kong to swiftly follow the United States' approval of spot bitcoin ETFs and position the city as a leading hub in the cryptocurrency space. With Hong Kong and Singapore vying for hub status in the Asian region relative to the digital assets space, the launch of ETF products would give the Chinese autonomous territory a competitive head start given that Singapore doesn’t appear to be close to accommodating crypto ETFs for the time being.

Korea Information Certificate Authority Dives into NFT Domain with New Platform LaunchKorea Information Certificate Authority (KICA), a South Korean certification service provider, has recently ventured into the NFT domain through its new platform, Web3id.kr.Photo by Choong Deng Xiang on UnsplashNFT domainsNFT domains function as user-friendly addresses that simplify the cumbersome 42-character cryptocurrency wallet address. As part of this new initiative, KICA partnered with the Web3 identity platform, Unstoppable Domains, in February to facilitate the creation of NFT domains specifically for the South Korean market.An official from KICA emphasized the versatility of NFT domains, noting that a single domain can act as a distinctive username across various dApp platforms. To celebrate the debut of Web3id.kr, KICA is conducting a promotional event between August 17 and September 16. At the end of this event, 100 lucky participants, chosen randomly from those who promote Web3id on their social media accounts, will be awarded credits. These credits can then be redeemed at Unstoppable Domains for an NFT domain.From Web2 to Web3KICA, with its 24-year legacy, has been a frontrunner in offering Web2 authentication services such as public key infrastructure (PKI) and biometric solutions, emphasizing its prominence in the Know Your Customer (KYC) authentication sector. The firm is currently ramping up its efforts to stay ahead in the evolving Web3 space. A testament to this is its recent acquisition in August of Digitalzone, a digital certificate solution provider that holds a market share of over 50% in the domestic certificate sector for universities and hospitals.