The inflows from the newly launched spot Bitcoin exchange-traded funds (ETFs) in Hong Kong are insufficient to cover the outflows from the 11 spot Bitcoin ETFs in the United States.
According to James Butterfill, the head of research at CoinShares, the Hong Kong ETFs received net inflows of $217 million this week. However, this is lower than the net outflows of $298 million generated by the 11 U.S. spot Bitcoin ETFs, as reported by Dune.
Institutional inflows from ETFs played a significant role in the recent Bitcoin rally to new all-time highs. CryptoQuant research revealed that Bitcoin ETFs accounted for approximately 75% of new investments when the cryptocurrency surpassed the $50,000 mark on February 15.
On May 1, Fidelity’s Wise Origin Bitcoin Fund saw the majority of outflows, selling over $191 million worth of Bitcoin. Grayscale’s ETF had the second-largest daily outflows, with $167.4 million worth of BTC sold, according to Farside data.
The first batch of Hong Kong Bitcoin and Ether-based ETFs launched for trading on April 30, generating excitement among crypto holders. However, trading activity has been disappointing. The Hong Kong-based ETFs only accumulated $12.4 million in trading volume on the first day, in contrast to the $4.6 billion trading volume of U.S. spot Bitcoin ETFs.
Nevertheless, this is a significant figure considering the size of the Hong Kong market, which is equivalent to $1.6 billion worth of trading volume in the United States, according to senior Bloomberg ETF analyst Eric Balchunas.
Although the inflows were relatively small, the launch of the Hong Kong ETFs could set an important precedent for other jurisdictions, according to James Wo, the founder and CEO of DFG.
The debut of the first Hong Kong ETFs turned out to be a “sell-the-news” event for Bitcoin holders, as the cryptocurrency fell below the $60,000 mark on May 1. This was the first time Bitcoin traded below $60,000 since the end of February.
Losing the strong support line at $59,000, which also represented the short-term holder realized price (STH-RP), could potentially lead to Bitcoin revisiting the $50,000 mark, according to Jag Kooner, head of derivatives at Bitfinex.
In related news, Tether recorded a profit of $4.5 billion in the first quarter of 2024, with the majority coming from Bitcoin and gold.