Hong Kong Bitcoin ETFs To Reach $1 Billion AUM By 2024 End, Kraken Unit Predicts

London-based CF Benchmarks, a unit of crypto exchange Kraken, is positioning itself as a notable beneficiary of the surge in spot Bitcoin ETFs this year and shares an increasingly bullish outlook for the ETF market in Hong Kong and the US through 2024. 

According to Bloomberg, with the recent debut of these ETFs in the US in January and their subsequent launch in Hong Kong, CF Benchmarks has become a key reference data provider for approximately $24 billion of cryptocurrency ETFs. This figure is dominated by Bitcoin funds, including the $15.9 billion vehicle offered by BlackRock in the US.

Bitcoin ETFs Set To Shine In Hong Kong

CF Benchmarks licenses its benchmarks to the ETFs and earns fees based on assets under management. The company currently represents around half of the crypto benchmarking market and is actively collaborating with the new Bitcoin ETFs in Hong Kong. 

Sui Chung, the CEO of CF Benchmarks, told Bloomberg that he envisions expanding crypto ETFs into other markets such as South Korea and Israel. Chung notes that South Korea, in particular, has seen ETFs become the preferred option for long-term savings and has shown a high level of adoption of digital assets.

Notably, while CF Benchmarks initially anticipated $5 billion in assets for the US spot-Bitcoin ETFs utilizing its indexes, the actual amount has exceeded four times that figure. 

Looking ahead, Chung expects the Hong Kong products to accumulate as much as $1 billion in funds under management by the end of 2024.

Contrasting Trends

The introduction of ETFs in the US sparked a significant rally, propelling Bitcoin to an all-time high of nearly $74,000 in March. However, since then, the token has experienced a decline, shedding approximately 20%, to a current trading price of $59,000 as investor demand for the funds waned. 

On Wednesday, the group of nearly a dozen US products faced its largest daily net outflow, resulting in assets under management standing at approximately $47 billion.

On the other hand, Hong Kong’s emerging market recorded a trading volume of HK$48.91 million (approximately US$6.26 million) for six Hong Kong-based ETFs on May 3. 

Among the six Hong Kong spot ETFs for virtual assets, the Bitcoin ETF commanded the lion’s share of trading volume, accounting for HK$43.41 million. Additionally, the Ethereum ETF recorded a trading volume of HK$5.5 million.

In contrast to the Hong Kong market, the trading volume of US-based Bitcoin ETFs soared to an impressive $1.72 billion on May 2.

Featured image from Shutterstock, chart from TradingView.com