Bitcoin, Ether plunge after tepid launch of Hong Kong ETFs

In mainland China, cryptocurrency is banned, but Hong Kong has been promoting itself as a global digital asset hub, part of a drive to maintain its attraction as a financial centre

Major cryptocurrencies came under pressure after a tepid debut of a batch of exchange-traded funds (ETFs) in Hong Kong, linked to several digital assets on April 30.

Bitcoin, which is the largest cryptocurrency by market value, fell 4.04 percent to Rs 51,12,625.33 on April 30, while the second largest digital asset Ethereum slipped 6.25 percent to Rs 2,51,570.37

The debut of six spot bitcoin and ether ETFs will test Asian investors' enthusiasm for cryptocurrency assets. It marks the first launch of spot cryptocurrency ETFs in the continent and comes just three months after the US launched its first ETFs to track spot bitcoin.

In the mainland China, cryptocurrency is banned, but Hong Kong has been promoting itself as a global digital asset hub, part of a drive to maintain its attraction as a financial centre.

Reuters reported that the spot bitcoin ETFs launched by China AMC 3042.HK, Harvest 3439.HK and Bosera 3008.HK gained between 1.5% and 1.8% at the close, while the three ether ETFs 3046.HK, 3179.HK, 3009.HK edged down.

The first day of ETF trading in the US had seen a total turnover of $4.6 billion. In comparison, the Asian debut saw a less-than-desired turnover of $112 million on the first day.

The launch in Hong Kong puts the city in direct competition with the US, which has seen a net inflow of $12 billion in spot bitcoin ETFs.

Bitcoin has gained roughly 50 percent this year and hit an all-time high of $73,803 in March. It was trading at around $52,000 on Tuesday. Ether has risen more than 30% year-to-date.

(With inputs from Reuters)