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Hong Kong's Debut of Spot Bitcoin and Ether ETFs Nets Over $11 Million in Trading Volume
On their debut trading day, Hong Kong’s six new spot Bitcoin and Ether exchange-traded funds (ETFs) achieved a trading volume of over HK$87.5 million ($11.2 million), which, although significant, starkly contrasts with the $4.6 billion first-day volume seen by 11 spot Bitcoin ETFs in the United States in January. Managed by China Asset Management, Harvest Global, Bosera, and HashKey, these ETFs saw ChinaAMC leading with its Bitcoin ETF securing $121.7 million in assets under management (AUM) and its Ether ETF capturing $20.4 million. Individual trading volumes varied, with the ChinaAMC Bitcoin ETF recording the highest at HK$37.16 million. Despite the modest start compared to the U.S., experts like Justin d'Anethan of Keyrock consider the launch a success, noting the different market dynamics in Hong Kong, which does not include mainland China investors. The absence of staking rewards, which could add around 4% APR, was noted as a significant missing benefit that could influence investor interest, with further regulatory discussions needed to potentially introduce such features.
MicroStrategy Boosts Bitcoin Holdings to 214,400 BTC, Averaging $35,180 Each in Q1 2024 Earnings Update
MicroStrategy, led by Michael Saylor, has updated its Bitcoin holdings in its first-quarter 2024 earnings report, revealing it now holds 214,400 Bitcoin valued at $7.54 billion, averaging $35,180 per token. Since the end of the previous quarter, the firm purchased 25,250 Bitcoin for $1.65 billion at an average price of $65,232 each, and an additional 122 Bitcoin in April for $7.8 million. As of March 31, MicroStrategy reported holding 214,278 Bitcoin, indicating minor acquisitions after March 19. The firm experienced a 5% decline in year-over-year revenue, totaling $115.2 million. CFO Andrew Kang highlighted the firm's successful capital-raising efforts, including two convertible debt offerings that facilitated further Bitcoin acquisitions, marking the 14th consecutive quarter of Bitcoin portfolio expansion.
Stablecoins Surpass Visa in Transaction Volume with Tether, USDC, and DAI Leading the Charge
In the past 30 days, the three leading stablecoins—Tether, USDC, and DAI—have collectively processed more transaction volume than Visa's average monthly total for 2023, according to data from onchain specialist Nansen. Tether alone accounted for $654 billion, DAI for over $394 billion, and USDC for $321 billion, totaling $1.369 trillion, surpassing Visa's monthly average of $1.23 trillion. This comparison underscores the significant market presence of stablecoins, with Tether's volume nearly matching that of Mastercard and exceeding PayPal's. Meanwhile, Visa has argued in a report that USDC is the leading stablecoin in terms of transaction volume, especially when adjusting for inorganic activities such as bot transactions and complex smart contract interactions. This cleansing method purportedly shows USDC's volume surpassing Tether's when considering only organic transactions.
Trading Desk Insights
Bitcoin is poised to break a seven-month winning streak, recording an 11% loss this month—the first since August 2023. Several factors are at play here: fading hopes for Federal Reserve rate cuts, waning demand for U.S.-based spot BTC ETFs, and a general risk-off mood across financial markets have tempered the bitcoin rally. However, the continued growth of major stablecoins provides some support. Despite the downtrend, there's significant trading activity, particularly around the $60,000 level.
In the ETF arena, the market saw another wave of outflows, totaling $51.6 million. Notably, Blackrock has remained inactive, recording zero inflows over the last four sessions.
In Hong Kong, the debut of BTC and ETH ETFs fell short of expectations, garnering just $11 million in trading volume—far below the anticipated $100 million. U.S. ETFs fared much better on their first day, with trading volumes reaching $655 million.
On the stock market front, futures dipped into the red Tuesday following unexpected high wage data, stoking inflation worries ahead of Wednesday's Federal Reserve rate decision. The employment cost index, a key wage gauge, rose 1.2% in the March quarter, surpassing the forecasted 1%. This spike in treasury yields pulled the Nasdaq down by 0.5%.
As we close the month, stocks are on track for their first monthly loss since October, driven by sharply reduced rate cut expectations—from the six or seven cuts projected at the start of the year to just one in 2024. This change reflects ongoing inflation concerns and a resilient economy, suggesting the Fed may maintain higher rates for an extended period.
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This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
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