The numbers look pretty underwhelming, honestly.
By December 2024, Hong Kong's spot Bitcoin ETFs had scraped together just 4,560 BTC—about $444.6 million in total assets. Now compare that to the U.S., where spot Bitcoin ETFs hoovered up over $34 billion in their first year. Hong Kong's entire crypto ETF market? It's 0.023% of the Hang Seng Index. The U.S. sits at 0.019% of NYSE and NASDAQ combined.
But here's the thing. Talk to anyone in Seoul who actually follows both markets, and they'll tell you the headline comparison misses the point entirely. The structural setup matters way more than whether Hong Kong pulled in billions on day one. And those structural differences? That's exactly what Korean institutional folks are paying attention to.
Three Providers Walk Into Hong Kong...
Hong Kong kicked off Asia's first spot Bitcoin and Ethereum ETFs on April 30, 2024. Three issuers launched together: China Asset Management (ChinaAMC), Harvest Global Investments, and Bosera Asset Management working with HashKey Capital.
The Securities and Futures Commission approved all three simultaneously. Each provider launched both a Bitcoin product and an Ethereum product. Six ETFs, same day. By August 2025, things expanded—Pando Finance jumped in during July, then MicroBit Capital Management in August. Nine spot crypto ETFs total now.
Seoul traders caught something interesting right away: the fee war was real. Harvest completely waived management fees for the first six months, then dropped to 0.30% ongoing. Bosera-HashKey came in at 0.60%. ChinaAMC went highest at 0.99%.
That fee spread tells you these providers were actually fighting for market share, not just checking boxes for regulators.
Fast forward to December 2024: ChinaAMC held the biggest chunk with $142 million in net assets. Bosera-HashKey had $99 million. Harvest came third with $31 million. The concentration's pretty telling—institutions weren't just spreading money evenly. They picked favorites early.
The In-Kind Thing That Actually Matters
Hong Kong's ETFs let you do in-kind creation and redemption. Meaning you can swap actual Bitcoin or Ethereum directly for ETF shares, or flip it around and redeem shares for the underlying crypto. The U.S. model? Cash only.
Korean institutional traders who've dealt with commodity ETFs get why this is notable. In-kind creation keeps tracking error tight—the ETF price stays glued to the actual asset price because arbitrage traders can directly swap crypto for shares when gaps appear. With cash-only models, the fund manager has to scramble to buy or sell crypto when money moves in or out, which creates temporary price disconnects.
There's also a tax angle for crypto holders in some jurisdictions. You can convert directly to a regulated product without triggering a taxable sale. Swap coins for shares directly instead of selling to cash first.
OSL Digital Securities handles custody for ChinaAMC and Harvest products. They claim over 70% market share among Hong Kong's crypto ETF custodians. Pretty concentrated—three providers basically share one custodian's infrastructure. Efficient, sure. But also means if OSL has a bad day, so does most of the market.
The China Question That Explains Everything
Here's the real constraint: mainland Chinese investors can't touch these ETFs. At all.
China banned crypto mining in 2021 and maintains strict restrictions on digital asset trading. The "Southbound Stock Connect" program—which lets mainland investors trade certain Hong Kong securities—explicitly excludes crypto products. Not happening.
This explains everything about those modest inflow numbers. Hong Kong's domestic retail market is tiny. The region's entire ETF market sits around $50 billion in assets. The U.S. ETF market? Try $9 trillion.
Seoul observers understand what everyone's really waiting for. July 2025: Hong Kong crypto ETFs saw $14.1 million in inflows. U.S. products that same week? $4.36 billion. The gap reflects market size, not whether the products work.
If Beijing ever permits crypto exposure through Hong Kong's ETFs—even in some restricted regulatory sandbox—the whole dynamic flips overnight. But that's still hypothetical. The regulatory path doesn't exist yet.
Eugene Cheung from OSL mentioned back in 2024 that some signals from financial regulators suggested they're starting to pay attention to digital assets. Not a reversal of the ban, but maybe integration within controlled frameworks. Maybe. For now, it's all speculative.
What December 2024 Actually Showed
By December 11, 2024, Hong Kong's three original Bitcoin spot ETFs collectively held 4,560 BTC worth $444.6 million. The Ethereum funds held 16,280 ETH worth $59.6 million.
Breaking down the Bitcoin side:
- ChinaAMC Bitcoin ETF: roughly 1,950 BTC
- Bosera-HashKey Bitcoin ETF: roughly 1,360 BTC
- Harvest Bitcoin ETF: roughly 425 BTC
Bitcoin absolutely crushed Ethereum in terms of asset accumulation. Pretty much mirrors what happened globally during 2024—Bitcoin pulled in about 85% of all crypto ETF inflows worldwide.
Trading volumes stayed modest but crept upward. The three original Bitcoin ETFs averaged $6.6 million daily turnover in Q1 2024. By Q4, they hit roughly $8-10 million daily. Not explosive, but steady.
The funds did hit some turbulence. May 13, 2024: all six crypto ETFs reported negative flows at the same time for the first time since launch. $39 million in combined outflows across Bitcoin and Ethereum products. Most of it concentrated in ChinaAMC products, which suggests institutional rebalancing rather than panic selling.
How Seoul's Watching Hong Kong's Playbook
South Korea announced in June 2025 they're planning to approve spot crypto ETFs by the second half of 2025. The Financial Services Commission sent a roadmap to the Presidential Committee laying out the infrastructure for issuance, custody, trading, evaluation standards—the whole thing.
Korean regulators specifically studied Hong Kong's approach. The SFC's licensing requirements, custody standards, operational oversight framework—all of it became reference material. Korea holds about $75.7 billion in retail crypto assets as of end-2024. One of the world's biggest retail crypto markets. The FSC wants to keep that capital from flowing elsewhere while still protecting investors.
President Lee Jae-myung's campaign promise to lift restrictions on spot crypto ETFs pushed this forward. The policy shift shows Korea's worried about falling behind regional financial centers. Japan started reviewing crypto treatment under securities regulations during 2025 too, potentially opening the door for crypto ETFs there.
Pattern Seoul observers notice: Hong Kong moved first in Asia, set up operational precedents, proved that regulated crypto ETFs could function without blowing up. First-mover advantage matters when you're trying to become a regional digital asset hub, even if your initial AUM numbers look kind of sad.
The Distribution Problem Nobody Talks About
OSL's Gary Tiu pointed out something crucial back in August 2024: Hong Kong's financial system has layers upon layers of intermediaries—brokers, banks, custodians—each one adding friction to crypto ETF trading. Traditional equity ETFs glide through these layers because the relationships and systems already exist. Crypto products? Dealers are hesitant.
Chen Zhao from Fosun Wealth noted the shortage of dealers and brokers willing to handle crypto ETFs. The distribution infrastructure just hasn't developed yet. Retail investors who want crypto exposure often just... go directly to exchanges. Why navigate through multiple financial intermediaries to buy an ETF when you can trade on an exchange?
Korean traders totally get this from their own market. South Korea's huge retail crypto population (roughly 15.6 million active traders as of November 2024—nearly 30% of the population) mostly uses domestic exchanges like Upbit and Bithumb. When Korean spot crypto ETFs eventually launch, how well the distribution channels work will matter more than anything about the products themselves.
The intermediary reluctance isn't even really about risk. Hong Kong's crypto exchanges operate under SFC licensing with strict AML/KYC requirements. It's operational integration. Banks and brokerages need to update systems, train staff, establish internal policies for crypto ETF transactions. That stuff takes time.
What Pros Are Actually Positioning For
OSL Managing Director Ryan Miller projected "substantial growth" in Hong Kong crypto ETF volumes for 2025. The optimism comes from macro factors: friendlier U.S. policy under Trump's second term, interest rate adjustments, improving global crypto sentiment.
His argument that U.S. and Hong Kong crypto ETFs performed similarly when measured as percentage of equity market caps (0.019% vs 0.023%) is actually kind of smart reframing. Hong Kong products aren't underperforming relative to market size—they're hitting comparable institutional adoption rates within a much smaller total market.
Korea's pending ETF approval creates real competitive pressure though. If Korean products launch with solid distribution through major brokerages and see massive retail participation, Hong Kong issuers will need to show clear advantages—the in-kind feature, potential mainland access, operational efficiencies—to stay relevant regionally.
The real test comes if regulatory walls start coming down. Singapore, Malaysia, and Japan all exploring crypto ETF frameworks during 2025-2026 suggests regional acceptance is building. Hong Kong's 18-month operational history by late 2025 gives them the longest track record in Asia, which matters when institutional allocators are evaluating risk.
What Seoul Traders Actually Care About
Look, the Hong Kong Bitcoin ETF story isn't really about that $444 million AUM figure from December 2024. That number reflects artificial constraints—mainly China restrictions—not whether the products actually work or if there's demand.
Seoul-based professionals recognize what's been built here. The in-kind creation mechanism, competitive multi-provider environment, regulatory framework—it's operational infrastructure that can scale fast if access restrictions ever ease. The current numbers become less relevant than the institutional plumbing that's now in place and stress-tested.
For Korean investors watching regional crypto market development, Hong Kong's experience is basically a preview. When Korea launches spot crypto ETFs in H2 2025, expect similar issues: distribution gaps, fee wars between issuers, concentration among a few big providers. But potentially way higher assets if retail participation channels actually work smoothly.
The numbers Seoul traders watch aren't the absolute AUM figures. They're tracking custody concentration, tracking error rates, fee trends, whether institutional allocation patterns stabilize or stay volatile. Those metrics show whether crypto ETFs function as genuine portfolio tools or remain speculative retail products.
Kind of makes sense when you think about it. Infrastructure matters more than initial adoption when the addressable market is artificially constrained. Hong Kong built the rails. Now the question is what happens when more people get access to use them.
Actually, one more thing worth noting. Visit any crypto trading floor in Gangnam and ask about Hong Kong ETFs, and the conversation quickly turns to "what happens when...?" not "how are they doing now?" That future conditional is the whole story.
Disclaimer: This article is for educational and informational purposes only and should not be considered as financial, investment, or trading advice; always conduct your own research and consult with a qualified financial advisor before making any investment decisions.