Hong Kong Vies With US in Bitcoin ETF Market After Crypto’s Revival

A batch of exchange-traded funds investing directly in crypto debuted in Hong Kong on Tuesday, heralding potential competition for US Bitcoin products whose popularity stoked a record rally in the digital asset.

Harvest Global Investments Ltd., the local unit of China Asset Management, and a partnership between HashKey Capital Ltd. and Bosera Asset Management (International) Co. each listed Bitcoin and Ether ETFs in the city.

The level of demand for the funds will provide clues on whether Hong Kong’s push for a tightly regulated digital-asset hub is gaining traction. Officials are hoping the crypto pivot will help to restore the city’s reputation as a modern financial center, a standing that was tarnished by a crackdown on dissent.

US spot-Bitcoin ETFs from issuers including BlackRock Inc. and Fidelity Investments went live in January and have $52 billion of assets so far in an historic rollout. For Hong Kong, Bloomberg Intelligence’s Rebecca Sin estimates the city’s Bitcoin and Ether funds may amass $1 billion over two years.

Such a projection is “too small,” Han Tongli, the chief executive officer of Harvest Global, said in an interview. That’s partly because financial products and services in Hong Kong are “accepted by investors both in the West and in the East” whereas the US caters mainly to the former, he said.

The six new ETFs saw a combined $11 million of trading volume in the first session, data compiled by Bloomberg show. That’s a far cry from the $4.6 billion in total volume the 10 US spot-Bitcoin products recorded in their debut.