3. February 2023

CSOP Bitcoin Futures ETF Hits HK Exchange, Signaling Crypto Acceptance in Asia

• The CSOP Bitcoin Futures ETF (3066.HK) will be tradable on the Hong Kong Stock Exchange starting December 16.
• The ETF will track the Chicago Mercantile Exchange’s Bitcoin ETFs, and has received approximately $53 million in initial investments.
• The approval of the ETFs signals acceptance amongst traditional finance in the Asian markets, though it is not truly bitcoin since one cannot exchange the ETF shares for real bitcoin.

Investors in the Hong Kong Stock Exchange will soon be able to trade the CSOP Bitcoin Futures ETF (3066.HK), with the ETF becoming tradable on the exchange starting December 16. The ETF will track the Chicago Mercantile Exchange’s Bitcoin ETFs through active investment, and has received approximately $53 million in initial investments at a listing price of $1 (HKD 7.75).

The approval of the ETFs has both positive and negative connotations. On the one hand, it signals acceptance amongst traditional finance in the Asian markets, suggesting that more investors are becoming comfortable with cryptocurrency assets. On the other hand, the ETF is not truly bitcoin in the sense that one cannot exchange the ETF shares for real bitcoin, nor is the ETF itself backed by a reserve of actual bitcoin. There have been claims that such “paper bitcoin” can actually suppress the price of real bitcoin by diverting demand away from the traditional cryptocurrency asset.

The first bitcoin futures ETF approved in America, the NYSE-listed ProShares Bitcoin Strategy ETF, launched in October of 2021. It generated $1 billion in trading volume on its first day. This was a signal that the market was willing to accept such an asset, and this eventually led to the Hong Kong Securities and Futures Commission announcing that they would allow the launch of ETFs tracking crypto futures for public offering on 31 October 2022. This marked the first time that Asian retail investors were given the opportunity to gain exposure to virtual assets.

It will be interesting to see how the CSOP Bitcoin Futures ETF performs when it is launched in December, and whether or not its approval signals further acceptance of cryptocurrency assets in the Asian markets.