© Reuters. FILE PHOTO: In this illustration, representations of the Bitcoin cryptocurrency are seen, August 10, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
By summer zhen
HONG KONG (Reuters) – Hong Kong's largest bitcoin futures exchange-traded fund saw its assets under management quintuple in the past five months to just over $100 million, as local investors chased a rally in the most well-known cryptocurrency in the world.
Hong Kong is a relative latecomer to cryptocurrency trading, approving its first three cryptocurrency futures ETFs in late 2022.
CSOP Asset Management, which manages the CSOP ETF, said demand grew substantially in February.
The approval and launch of spot bitcoin ETFs in the U.S. this year has spurred demand from investors who believe the token's limited supply will drive up prices, said Alessandro Zhu, who oversees crypto products and is deputy director. fixed income at CSOP Asset Management.
The significant outperformance of Hong Kong stocks has also boosted demand, he added.
Zhu noted that although cryptocurrency trading is prohibited in mainland China, Chinese offshore financial institutions could invest in bitcoin ETFs in Hong Kong.
Bitcoin has gained 45% this month alone and, trading around $63,000 on Thursday, is approaching its November 2021 all-time highs near $69,000.
Assets managed by the CSOP Ether Futures ETF have also benefited, doubling this year.
Volumes have increased.
The average daily turnover of the CSOP Bitcoin Futures ETF this year has risen to $2.8 million compared to $0.97 million last year, now on par with the turnover of some Hong Kong real estate giants such as Wharf (Holdings).
Some market participants expect Hong Kong to approve the first spot bitcoin ETF this year, as officials are keen to develop the city as a hub for virtual assets.
“The Hong Kong bitcoin ETF is showing promising signs with a large number of applications (spot bitcoin ETF) to the Hong Kong Securities and Futures Commission in recent months,” said Kennix Chan, CEO of Victory Securities. .
