Bitcoin fell below $62,000 in value following the underwhelming debut of Hong Kong’s Exchange Traded Funds (ETFs), which had been eagerly anticipated. Coindesk reported that Bitcoin experienced selling pressure during European trading hours due to disappointing performance of the newly launched ETFs in Hong Kong, linked to bitcoin and ether.
The primary cryptocurrency by market capitalization dropped nearly 2% from $63,300 to below $61,000 within an hour, according to data from CoinDesk. Additionally, Ether, the second-largest cryptocurrency, saw a 2.8% decline to $3,066.
The six ETFs that started trading in Hong Kong had a notably poor performance, generating a trading volume of only $11 million compared to the expected $100 million. Bitcoin ETFs contributed $8.5 million to the total, with Ether ETFs making up the remainder.
The performance of Hong Kong’s ETFs contrasts sharply with that of the United States ETFs, which launched on January 11 and attracted $655 million on its first trading day. Since then, the US ETFs have accumulated nearly $12 billion in investor funds. However, inflows have recently slowed, halting Bitcoin’s upward momentum.
The weak demand from investors indicated by the numbers from the Hong Kong ETFs negatively impacted Bitcoin’s price, pushing it below $62,000. Hong Kong’s spot ETFs tied to Bitcoin and Ether are the first in Asia and the second major ETFs after those in the United States.
Spot ETFs offer investors exposure to cryptocurrency without needing to own it directly, making them preferable to futures-based ETFs, which incur rollover costs. Approval for Ether Spot ETFs is still pending in the United States following the success of spot Bitcoin ETFs.
