The debut comes three months after the United States gave the greenlight to ETFs pegged to bitcoin's spot price, making it easier for mainstream investors to add the unit to their portfolio.
Hong Kong's pioneering crypto ETFs on the city's bourse include six funds issued by three managers -- Bosera Funds, China Asset Management (Hong Kong) Limited and Harvest Global Investments.
Each company issued a spot bitcoin and a spot ether ETF, which can be traded in both Hong Kong and US dollars, while ChinaAMC (HK) also allowed trading in Chinese yuan.
"These are the first spot ETF products of virtual assets in (the) Asia market, which has proven Hong Kong's leading status in virtual asset development in the region," Joseph Chan, the city's undersecretary for financial services, said at the bell tolling ceremony in the morning.
He added that the government would submit a proposal for creating a licensing scheme for over-the-counter virtual asset trading services to the city's legislature "as soon as possible".
By the close of trade Tuesday, the new bitcoin ETFs recorded an average price rise of nearly 1.7 percent, while the ether ETFs dropped about 0.5 percent.
CCData, a digital assets analysis firm, said Friday that the new funds were "predicted to not attract the same level of inflows as those in" the United States.
But "industry experts believe they might encourage other nations to approve cryptocurrency ETFs and could help promote the wider adoption of digital assets", it said.
- 'Obvious advantage' -
Hong Kong also allows investors to carry out in-kind creation and redemption through eligible dealers. That means bitcoin and ether -- instead of official currencies such as the US dollar -- can be used to invest in the ETFs.
Han Tongli, CEO of Harvest Global, said having in-kind trading in Hong Kong was an "obvious advantage over the United States".
"I believe we are not rivalling against our peers in Hong Kong but the large fund management companies in the US," Han said, according to Hong Kong-based news outlet Techub News.
"We are competing with them on behalf of Hong Kong, we are defending and developing Hong Kong's status as an international financial hub."
Han added that Hong Kong could also be a sandbox for China to test virtual asset trading -- which remains banned in the mainland.
In the United States, demand for bitcoin ETFs has slowed after a strong start in early February, according to data from Farside Investors.
Hong Kong has been trying to edge ahead as a regional digital asset hub.
Last December, the city's regulatory Securities and Futures Commission said it was ready to allow retail investors to buy funds that are 100 percent invested in some of the digital assets, triggering the first wave of applications from fund managers.
Asian markets build on Wall St rally, yen holds bounce
Hong Kong (AFP) April 30, 2024 -
Asian markets extended a rally Tuesday following advances on Wall Street, while the yen held gains after the previous day's sharp swings and focus turned to the Federal Reserve's upcoming policy decision.
A forecast-beating series of earnings from top-tier firms in recent weeks, particularly tech titans including Alphabet and Microsoft, has been a key driver of the latest advances, offsetting fading hopes for a US interest rate cut this year.
While the Fed is widely expected to stand pat on borrowing costs after its meeting Wednesday, its statement and boss Jerome Powell's comments will be pored over for clues about their plans for the rest of the year.
Since the start of 2024, traders have been lowering their expectations for how many reductions the bank will make as inflation continues to hold above target and various indicators show the economy and labour market remain in rude health.
Still, investors have largely come to terms with the fact that interest rates will remain elevated for an extended period and are taking heart from the strong corporate reports.
Closely watched jobs data is due to be released at the end of the week, while Apple, Coca-Cola and Pfizer are pencilled in to announce quarterly earnings.
In early trade, Hong Kong rose for a seventh successive day, while Shanghai, Sydney, Seoul, Singapore, Wellington, Taipei and Jakarta were also on the rise.
News that China's April factory activity grew more than expected -- even if at a slower pace than last month -- also provided some support.
Tokyo piled on more than one percent as it played catch-up with Asia's gains on Monday, which was a Japanese holiday.
The yen weakened slightly to more than 156 per dollar but held much of the previous day's surge that observers speculate came on the back of an intervention by authorities after it hit a fresh 34-year low of 160.17.
Traders are on guard for further volatility in the pairing after the Bank of Japan decided against shifting further from its ultra-loose monetary policy last week and gave little idea about when it would.
That makes the Fed's meeting even more crucial, with observers warning that a more hawkish tilt could see the dollar spike again, though many warn the yen will likely hit 160 again owing to the wide differences in the central banks' monetary policies.
"Going back to 160 again is pretty much in sight, unless the macroeconomic situation changes," said Yusuke Miyairi of Nomura International.
He added that "the market is not too afraid of fighting the (Ministry of Finance) in terms of the currency".
Oil prices extended losses on hopes for a possible ceasefire in Gaza, with US President Joe Biden said to be calling for Egypt and Qatar to "exert all efforts" towards securing the release of hostages held by Hamas as part of negotiations.
Hamas is expected to respond to a proposal for a second truce in Gaza, coupled with a fresh release of hostages.
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