INSUBCONTINENT EXCLUSIVE:
The launch of cryptocurrency exchange-traded funds (ETFs) in Asia, particularly in Hong Kong, was met with great anticipation earlier this
year.However, these investment vehicles have faced significant challenges in attracting investors and generating positive returns.The
lukewarm reception highlights the complex interplay of market volatility, regulatory uncertainty, and investor sentiment in the rapidly
including China Asset Management (ChinaAMC), Harvest Global Investments, and Bosera International, in collaboration with HashKey.The Rocky
Road for Crypto ETFs in Asia: A Tale of Caution and Potential
(Photo Internet reproduction)However, the performance of these ETFs has been disappointing
As of August 31, 2024, all six funds posted negative returns:Bosera HashKey Bitcoin ETF: -4.65%ChinaAMC Bitcoin ETF: -6.69%Harvest Bitcoin
Spot ETF: -6.86%Harvest Ether Spot ETF: -20.20%ChinaAMC Ether ETF: -20.76%Bosera HashKey Ether ETF: -20.87%In addition, recent volatility in
cryptocurrency markets and broader economic uncertainties contribute to this poor performance.Investor Sentiment and Market DynamicsThe
price swings throughout 2024, despite posting year-to-date gains of around 24% as of early September.Desmond Yong, a blockchain industry
professional, noted the lack of interest among conference attendees in Taiwan
He suggested that the industry may have overhyped the potential of crypto ETFs.Other experts echo this sentiment, noting that many crypto
enthusiasts prefer owning digital assets directly rather than investing in ETFs.Regulatory Landscape Across AsiaWhile Hong Kong has taken a
progressive stance on crypto ETFs, other Asian financial centers have been more cautious.1
Singapore: The Monetary Authority of Singapore (MAS) has not approved crypto ETFs for retail investors, stating that digital payment tokens
are not permitted investments for retail collective investment schemes.2
Japan: The Financial Services Agency has been hesitant to amend investment trust laws to allow for crypto ETFs.3
South Korea: The country is set to implement the Virtual Asset User Protection Act in July 2024, potentially paving the way for more
crypto-friendly regulations.4
Australia: The country has approved some crypto ETFs, following a similar path to the United States.Institutional Interest and Future
ProspectsDespite the current challenges, there are signs of growing institutional interest in crypto investments across Asia:A survey by
Nomura Holdings found that 54% of Japanese institutional investors intend to invest in crypto assets over the next three years.62% of
surveyed investors in Japan see crypto assets as a diversification opportunity.In Hong Kong, some analysts predict that up to $25 billion in
new demand could be unleashed by spot Bitcoin ETFs.Global context and U.S
influenceGlobal trends, especially developments in the United States, heavily influence the performance and adoption of crypto ETFs in
presidential election in November 2024 is seen as a potential catalyst for crypto markets, with different candidates perceived as having
impact investor appetite for crypto assets and related ETFs.ConclusionThe initial reception of crypto ETFs in Asia has been cooler than
However, the market is still in its early stages.As regulatory frameworks evolve and institutional interest grows, the landscape for crypto
investment products in Asia may change significantly.However, challenges such as market volatility, regulatory uncertainty, and competition
from direct crypto investments remain significant hurdles
These issues continue to impede the widespread adoption of crypto ETFs in the region.
