Hong Kong’s Bitcoin and Ether exchange-traded funds (ETFs) experienced a dramatic reversal in fortune, wiping out two weeks of inflows in just one day. On Monday, May 13, net outflows from these crypto ETFs reached a staggering $39 million, marking the largest single-day outflow since their launch.
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Major Outflows
The primary contributors to these outflows were ETFs managed by Bosera, ChinaAMC, and Harvest Global. Specifically:
– Bitcoin ETFs: These funds saw a collective outflow of $32.7 million. Among them, ChinaAMC’s Bitcoin ETF was the hardest hit, losing $15.5 million.
– Ether ETFs: These funds experienced joint net outflows of $6.6 million, with Harvest Global and ChinaAMC each facing $3 million in outflows.
This outflow trend has been persistent, with the crypto ETFs experiencing three consecutive days of net outflows, totaling $52.5 million since May 9.
Impact on Performance
Since their trading debut on April 30, the total outflows have surpassed the inflows, erasing all the gains these ETFs had made. As of May 13, the cumulative outflows stood at $20.9 million, outstripping the $18.4 million in inflows recorded by May 10.
Market Conditions
This sharp decline in fund inflows coincides with Bitcoin trading below $61,000, a drop attributed by many to the post-halving adjustment. The Bitcoin halving event on April 20 reduced mining rewards by 50%, a change designed to introduce scarcity and typically followed by a price slump as the market adapts to the new issuance schedule.
Comparison with U.S. Market
The crypto ETF market in Hong Kong remains significantly smaller compared to the United States. While Hong Kong’s ETFs collectively manage $179.2 million in assets, with 88.5% allocated to Bitcoin ETFs and the remainder to Ether ETFs, the U.S. market boasts 11 spot Bitcoin ETFs with over $50 billion in assets under management.
Conclusion
The record outflows from Hong Kong’s Bitcoin and Ether ETFs highlight the volatility and challenges facing the nascent crypto ETF market in the region. As these funds continue to navigate the market dynamics post-Bitcoin halving, investors and fund managers alike are closely watching for signs of stabilization and recovery.
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