By
Svetlana Soroka
June 14th, 2024
Despite being first in the market, Hong Kong’s Ethereum ETFs fail to gain enough traction with daily trading volumes dropping to their lowest.
The crypto market is abuzz with optimism around the approval of the first sport Ethereum ETF in the US. While this Ethereum investment product is yet to see the light of the day in the US, the Hong Kong regulators have already approved it last month.
However, the Hong Kong Ethereum ETFs have failed to gain enough traction in the market. On Wednesday, May 22, the Hong Kong Ethereum ETF witnessed the lowest trading volume on a daily basis, showing the lack of investor participation.
In recent days, Ethereum’s surge in popularity has become evident. However, data reveals that the net subscription for the Hong Kong Ethereum spot ETF on May 22 was merely 62.8 ETHs. Moreover, the total transaction volume for that day amounted to just $390,300, indicating a remarkably low level of participation in Hong Kong ETFs.
Well, this raises the question of whether the US markets will see a similar situation for their Ethereum ETFs. Note that the US market overall is too big in size in terms of liquidity infusion by large institutional players.
Citi reports that the open interest in Ether has begun to increase only recently. This development could potentially result in reduced volatility should the funds receive approval and be launched in the upcoming months. Todd Rosenbluth, head of research at VettaFi said:
“There has been strong demand for spot bitcoin ETFs in 2024 offered from some well-established asset managers . I believe there will be demand for pending ether ETFs, albeit less than what we’ve seen for Bitcoin.”
Bitcoin Maxis Unhappy with Ethereum ETF
In a recent analysis by the prominent crypto commentator known as ‘The Bitcoin Therapist’, concerns have been raised regarding the potential approval of an Ethereum ETF by the US Securities and Exchange Commission (SEC).
The analyst questions the competence of regulatory oversight, suggesting that if such approval were granted, it would signal a lack of regulatory scrutiny in the market.
Labeling Ethereum as a speculative platform for trading in what they term “centralized shitcoins”, The Bitcoin Therapist questions the sudden shift in regulatory sentiment towards Ethereum, especially considering Bitcoin’s own ETF approval just four months ago.
The development around spot Ethereum ETF has already built the chatter for having similar products for Solana. It will be interesting to see the SEC’s reactions to these developments.