Amid crypto turmoil, Hong Kong debuts first crypto futures ETFs

By Georgina Lee

HONG KONG (Reuters) – Two trade traded funds (ETF) that observe U.S.-listed cryptocurrency futures have raised a mixed $73.6 million forward of their debut on the Hong Kong inventory trade on Friday in defiance of the sector’s meltdown.

Cryptocurrencies have endured months of turmoil, with the collapse of crypto trade FTX the newest blow to the sector. Bitcoin, the most important cryptocurrency, has misplaced greater than 70% of its worth since hitting a document excessive in November 2021.

The ETFs, managed by CSOP Asset Management, put money into bitcoin and ether futures listed on the CME trade within the United States, the one cryptocurrency property presently permitted by Hong Kong’s Securities and Futures Commission (SFC).

The bigger of the 2, CSOP Bitcoin Futures ETF, pulled in $53.9 million, in keeping with the supervisor. That topped ProShares Bitcoin Strategy ETF, the first U.S. bitcoin futures ETF that debuted on the NYSE Arca trade in October 2021 with $20 million of seed capital, in keeping with media experiences.

“Coming after the latest liquidity issues affecting a number of the crypto platforms, our two crypto futures ETFs show that Hong Kong stays open-minded on the event of digital property,” stated Yi Wang, head of quantitative funding at CSOP.

Just earlier than FTX’s collapse final month, the SFC stated in October it might begin a session to permit retail traders to commerce cryptocurrencies and ETFs. The regulator had initially proposed proscribing participation to skilled traders.

“As the ETFs don’t put money into bodily bitcoin, and are traded on regulated U.S. and Hong Kong exchanges, there are extra regulatory safeguards for traders in comparison with tokens traded on unregulated platforms,” Wang stated.

On Friday, every lot buying and selling on the Hong Kong Exchanges & Clearing (HKEX) will debut at HK$780 every.

“The worth of bitcoin could also be topic to manipulation as a good portion is held by a small variety of holders” and the CME futures might drop to zero, the ETFs’ product doc filed to the HKEX stated.

(Reporting by Georgina Lee; Editing by Mark Potter)

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