Two Bitcoin ETFs launched in Australia in June — after six Bitcoin and Ethereum ETFs launched in Hong Kong in April. We'll see soon if more enter the market.) ETFs that launched in Hong Kong at the end of April. The crypto ETF market is beginning to take shape, and as things stand, it looks to be a two-horse race between Australia and Hong Kong as the race to capture market share heats up.
The flow of funds in Hong Kong has not matched up to the pre-launch hype, but the hype may be more to blame for that than the products. While the overall ETF market in Asia has seen a CAGR of 20% over the past 10 years, investor preference for ETFs here is still not as strong as in the U.S. TheAUM of all ETFs in the seven leading APAC markets accounts for just 4% of their total combined market cap. In the U.S., ETF AUM accounts for 16% of the total market.
If it happens, or even if it seems likely, that could bring a lot more providers into the Hong Kong market. Right now, there are still a few applicants waiting on approval, and several more providers watching and waiting to see if demand grows. If the Stock Connect doesn’t happen, this is probably a three- or four-player market. If it does happen, we’ll start to see more applicants trickling in to compete for even a tiny slice of the world’s largest market.