David Lawant, head of research at FalconX, remains optimistic about the growth potential of Hong Kong’s crypto ETFs, despite their current sluggish performance. Hong Kong’s spot Bitcoin and Ether exchange-traded funds (ETFs) currently manage $290.6 million in assets, a fraction of the nearly $57 billion held by U.S. crypto ETFs. Additionally, some of the six available funds in Hong Kong have days with no net inflows, leading to skepticism about their growth prospects.
However, Lawant remains confident that the prediction of Hong Kong ETFs reaching $1 billion in assets by the end of 2023 is still within reach, though he admits late 2025 might be a more realistic target. He attributes the slower-than-expected growth to typical market behavior, noting, “It’s common for ETF flows to slow after a strong launch, then build steadily over time.”
Lawant also highlights the size and importance of the Asian market within the global crypto ecosystem, believing it holds significant potential for future ETF growth. FalconX, an institutional prime brokerage, has been instrumental in supporting Bitcoin ETF sponsors in the U.S. by making markets and boosting liquidity in these products.
While Hong Kong’s ETFs have seen low market activity, Lawant isn’t deterred by the current stagnation. He points to periods of low market volatility, like those seen in recent months, as a reason for the lack of immediate growth but believes the long-term trajectory remains promising.
Despite the challenges, Lawant’s confidence in Hong Kong’s crypto ETFs reflects his broader belief in the region’s potential within the fast-evolving digital asset landscape. Regulatory clarity remains a key hurdle, but Lawant believes that over time, the market will continue to build momentum.
