Crypto ETFs Go Live In Hong Kong 🎈
Crypto ETFs Go Live In Hong Kong 🎈
Crypto markets down on ETF launch. Ethereum not a security, claims HK. Over $3B crypto tokens to unlock in May 2024. Bitcoin ETFs coming to Australia. How Lazarus laundered $200M hacked crypto in fiat
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Hong Kong launched six new spot Bitcoin and Ethereum ETFs on the Hong Kong Stock Exchange (HKEX) on April 30, 2024.
The first spot crypto ETFs in Asia.
Often stuck in the regulatory crossfire across various countries, it's a big deal for crypto that's developing regulated crypto investment products and ETFs worldwide.
What do we know?
Launched by the three Chinese firms: China Asset Management, Bosera Asset Management and Harvest Global Investments through their Hong Kong subsidiaries.
The ETFs are available: In HKD, USD, and RMB and qualified investors outside Hong Kong can participate, except mainland Chinese citizens.
In-Kind vs Cash Creation: Unlike US ETFs that use cash, Hong Kong will directly hold the underlying crypto for redemption.
The Day 1: Damp and Wet
The total trading volume for all six ETFs was 87.58 million HKD ($12 million USD).
This pales in comparison to the $4.6 billion USD debut of the first US Bitcoin ETF - 383 times the trading volume seen in Hong Kong.
Read: First day blockbuster 👊🏼💥🔥
Crypto didn't take this all too well, dived back in the RED SEA👇
Tiny Minnow Among Wall Street's Giants?
The US dominates the ETF world, with a whopping $8.9 trillion in assets compared to Hong Kong's $50 billion.
All of Hong Kong's ETFs make up just 0.6% of the US market.
Spot Bitcoin ETFs launched in January 2024 in the US have been a huge success, with an overall market cap of over $50 billion.
Hong Kong isn't expected to come anywhere close to those numbers.
Analyst expected it to reach US$200 million to US$300 million. The final market size can reach at least 2-3 billion US dollars.
Block That Quote 🎙️
Head of custody firm OSL Digital Securities, Wayne Huang.
“Ethereum is not a security … Hong Kong has already had a clear definition of Ethereum,” he added.”
Huang answered the big Ethereum question at the press conference - "Whether the United States defines Ethereum as a security does not affect the independent decision-making of the Hong Kong Securities Regulatory Commission.”
What's with the US? The US SEC is considering classifying Ethereum as a security, which could put a damper on these ETFs.
This is a big deal because Hong Kong is a major financial centre and their move could encourage other countries to embrace crypto.
It could also attract more investment into the region's crypto market.
Bitcoin ETFs Coming To Australia
Australia’s largest stock exchange — the Australian Securities Exchange (ASX), expected to approve spot Bitcoin ETFs by the end of 2024, reports Bloomberg.
Australia to follow the footsteps of US and HongKong? ASX manages about 80% of the local trades. As of March, ASX's domestic market capitalisation of $2.7 trillion.
Who's on board?
Major ETF providers like VanEck and BetaShares have already applied.
Australia's $2.3 trillion pension sector could drive the ETF demand.
Investors in Australia have been trading spot bitcoin ETFs since 2022 - The Global X 21Shares Bitcoin and Ethereum ETFs are the only two spot crypto funds listed on the global listing exchange, CBOE Australia.
Jeff Yew, the CEO of crypto asset management firm Monochrome — which has an application with CBOE Australia — “Australia is a very crypto-heavy country” and Australian spot Bitcoin ETFs to generate between $3 billion to $4 billion in net inflows within the first three years.”
In the Numbers 🔢
$3+ Billion
The value of crypto tokens scheduled to unlock in May 2024, as per Token Unlocks.
Tokens Incoming: Pyth and Aevo (formerly Ribbon Finance) are the heavy hitters, unlocking a combined $2.5 billion.
Pyth's 2.13 billion May 20, valued at approximately $1.24 billion on May 20.
Aevo's 827.6 million AEVO tokens on May 15, totalling $1.26 billion.
Other notable unlocks
Avalanche: 9.54 million AVAX ($329 million).
Memecoin: 5.31 billion MEME ($148 million) cliff unlock followed by a linear distribution.
Arbitrum: 92.65 million ARB ($104 million).
Aptos: 11.31 APT ($102 million).
ApeCoin: 15.6 million APE ($20 million).
How Lazarus Laundered $200M Hacked Crypto
North Korea's Lazarus Group is one of the most high-profile crypto hackers?
Why? They have been active since 2009, and stolen over $3 billion in crypto assets in the six years leading up to 2023.
Crypto detective ZachXBT has cracked the case.
This thread will blow your mind 🤯
How'd they do it?
Coin Mixers: These services muddied the waters by mixing stolen crypto with other transactions, making it harder to track.
Blockchain Hopping: Lazarus bounced the stolen funds across different blockchains (like Bitcoin and Ethereum), further confusing the trail.
P2P Exchanges: They used peer-to-peer exchanges where individuals trade directly, avoiding traditional exchange scrutiny.
Tell us more?
Over $44 million is suspected to have been funnelled through usernames like "EasyGoatfish351" and "FairJunco470" on these platforms.
Lazarus Group isn't slowing down. They're estimated to have stolen 17% of all crypto hacked in 2023.
The Surfer 🏄
Keonne Rodriguez, co-founder of Samourai Wallet, pleads not guilty to charges of money laundering and operating an unlicensed money-transmitting business. He has been released on a $1 million bond. Rodriguez is restricted from engaging in any crypto transactions without prior approval from the court.
Terraform Labs proposes a $1 million penalty in response to the SEC's request for $5.3 billion in disgorgement and civil penalties. Lawyers for Terraform argue against granting any injunctive relief or disgorgement, claiming it would involve the Luna Foundation Guard, a non-party in the case.
Tether has invested $200 million to acquire a majority stake in BlackRock Neurotech. Blackrock Neurotech develops medical devices powered by brain signals.
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