With Donald Trump’s re-election as US President, virtual currency has once again entered the public consciousness. Hong Kong Exchanges and Clearing (HKEX) has also been actively deploying related businesses; here is a brief record of HKEX’s development history regarding virtual currency.
Reviewing the details of the relevant contract list, I discovered that what was initially introduced wasn’t spot trading but futures. This is reasonable because the liquidity in the futures market is better and it’s easier to attract institutional investors. The subsequent introduction of spot ETFs was also reasonable, as ETFs are a more readily accepted investment tool.
Cryptocurrency List
The Hong Kong Stock Exchange’s market data does not provide an identifier to distinguish whether a contract is a virtual currency, but it can be determined by the contract name. The official transaction list, however, provides the corresponding subcategory virtualasset.
December 16, 2022
Hong Kong Exchange Welcomes Listing of Asia’s First Cryptocurrency ETFs
Hong Kong Exchanges and Clearing Markets Limited (HKEX) today (Friday) welcomed the listing of Asia’s first cryptocurrency ETFs, further expanding its product ecosystem and providing more choices for investors in Hong Kong and internationally
The two newly listed ETFs today — Southern East Investment Bitcoin Futures ETF (stock code: 3066) and Southern East Investment Ethereum Futures ETF (stock code: 3068) — are managed by Southern East Asset Management Co., Ltd. They track standardized, cash-settled bitcoin futures contracts and ethereum futures contracts traded on the Chicago Mercantile Exchange (CME).
Hong Kong Exchanges and Clearing Chief Operating Officer and Co-Head of Markets, Nicole Yau, said: “The two cryptocurrency ETFs listed today add another layer to Hong Kong’s increasingly rich and diverse ecosystem of exchange-traded products. These new products will provide investors in Asia with their first opportunity to participate in digital asset investments, and reflect our focus on the digital economy and market demand. We look forward to welcoming more thematic ETFs and new digital asset products in the coming months.”
ETFs are one of the fastest-growing businesses under Hong Kong Exchanges and Clearing, with a constantly expanding and increasingly diversified range of products. In 2022, they launched their first Metaverse ETF, their first carbon futures ETF, and their first blockchain ETF, and for the first time included ETFs in the Shanghai–Hong Kong Stock Connect scheme.
The average daily turnover of products listed on the Hong Kong Stock Exchange (ETPs, including ETFs and leveraged and inverse products) for the first ten months of this year was HK$11.8 billion, a 50% increase from HK$7.8 billion in the same period last year, reflecting the growing popularity of ETPs among investors. As of November 2022, there were 168 ETPs listed on the Hong Kong Stock Exchange with a total market capitalization of HK$373.5 billion.
April 30, 2024
Hong Kong Exchanges and Clearing welcomes the listing of the first virtual asset spot ETFs
Hong Kong Exchanges and Clearing Markets Limited (HKEX) today (Tuesday) welcomed the listing of Asia’s first virtual asset spot ETFs, expanding the range of products in the Hong Kong market and providing investors with a wider selection, solidifying Hong Kong’s position as a leading ETF market in Asia
Hong Kong Exchanges and Clearing Head of Securities Product Development Robert Lo said: “The newly launched virtual asset spot ETF will enrich Hong Kong Exchanges and Clearing’s diverse and vibrant ETF market ecosystem, providing investors with investment opportunities in a new asset class. Following the successful launch of virtual asset futures ETFs one year ago, Asia’s first batch of virtual asset spot ETFs will further enhance the variety and liquidity of tradable products on Hong Kong Exchanges and Clearing. We look forward to continuing to work closely with market participants to introduce more new products into our internationalized market.”
The first batch of virtual asset futures ETFs listed in 2022 have been highly favored by investors and enjoyed brisk trading. The average daily turnover of the three virtual asset futures ETFs listed in Hong Kong increased from HK$8.9 million in 2023 to HK$51.3 million in the first quarter of 2024, while also attracting net inflows of HK$529 million.
The exchange trading of products (including ETFs, leveraged and inverse products) is one of the fastest-growing markets in Hong Kong Exchanges and Clearing, with a continuously increasing variety of product types. The 16 newly launched ETF products in 2023 and Q1 2024 include Asia’s first Saudi Arabia ETF and Hong Kong’s first exchange-traded fund linked to options, bringing the total number of ETFs listed in Hong Kong to 179.
October 28, 2024
Hong Kong Exchanges and Clearing will launch a series of virtual asset indices
Hong Kong Exchanges and Clearing Limited (HKEX) today (Monday) announced that it will launch the HKEX Virtual Asset Index Series (the Index Series) on November 15, 2024, to provide a reliable benchmark price for the rapidly growing asset class of virtual assets, supporting Hong Kong’s development as Asia’s leading digital asset hub
This index series will provide a transparent and reliable benchmark for the pricing of Bitcoin and Ethereum in Asian time zones, committed to providing a unified reference price for virtual assets and resolving price discrepancies between global exchanges
Hong Kong Exchanges and Clearing Chief Executive Officer Nicolas Aguzin said: “We are pleased to launch the Hong Kong Exchange Virtual Asset Index Series to meet the demand in the region for this rapidly growing asset class. By providing a transparent and reliable real-time benchmark, we hope to help investors make informed investment decisions, thereby supporting the healthy development of the virtual asset ecosystem and consolidating Hong Kong’s position as an international financial center.”
The launch of this index series is part of Hong Kong Exchanges and Clearing’s commitment to exploring emerging areas, supporting the development of financial technology in Hong Kong while also providing investors with important benchmark tools and solutions in a constantly changing market environment
The index series will include reference indices for Bitcoin and Ethereum, as well as reference exchange rates
The reference index is based on a benchmark spot price, weighted by the 24-hour trading volume of Bitcoin or Ethereum, and calculated according to aggregated market prices from multiple major virtual asset exchanges, quoted in US dollars. The reference rate is designed for financial product settlement and is calculated daily at 4:00 PM Hong Kong time.
This index series will be the first in Hong Kong to comply with European Union Benchmark Regulation (BMR), and will be jointly managed and calculated by a benchmark management agency registered in the UK and virtual asset data and index provider CCData
The Government of the Hong Kong Special Administrative Region released a policy statement on virtual assets in 2022, aiming to foster a vibrant virtual asset industry and ecosystem in Hong Kong. The launch of the Hong Kong Exchange Virtual Asset Index Series will help the public increase their understanding of virtual asset investment trends by providing real-time data and daily reference prices in the Asian time zone.
More details regarding the design and calculation methods of the index series will be released in due course