The CEO of CF Benchmarks, a subsidiary of Kraken, predicts that crypto exchange-traded funds (ETFs) in Hong Kong will surpass $1 billion in belongings beneath administration (AUM) by the tip of 2024. At the moment overseeing $24 billion in AUM within the crypto benchmarking market, CF Benchmarks gives reference information for ETFs, primarily specializing in bitcoin merchandise corresponding to BlackRock’s IBIT. Regardless of a lackluster begin in Hong Kong, CF Benchmarks is now collaborating with new ETFs within the area, licensing benchmarks and charging charges proportionate to AUM development. CEO Sui Chung anticipates the growth of crypto ETFs to different international locations corresponding to South Korea and Israel, citing excessive adoption charges for digital belongings and a choice for ETFs as long-term financial savings choices in South Korea.
Having beforehand anticipated $5 billion in belongings for US spot-Bitcoin ETFs this 12 months, CF Benchmarks has seen that quantity far exceeded, reaching over 4 instances the estimate. Chung now predicts that Hong Kong merchandise may accumulate as a lot as $1 billion in funds beneath administration by 2024. The introduction of US ETFs led to a Bitcoin rally to a document excessive in March, however investor demand has since waned, leading to a decline of roughly $14,000 per token. Almost a dozen US ETFs noticed vital day by day web outflows on Wednesday, leaving belongings beneath administration at round $47 billion. CF Benchmarks believes there may be nonetheless potential for main income development, with expectations of double-digit development and plans to broaden its workforce.
Acquired by Kraken in 2019 for a nine-figure sum, CF Benchmarks gives Bitcoin pricing for derivatives on the Chicago Mercantile Alternate. This stays a big income stream for the corporate, which reached income of £6 million ($7.5 million) in 2022. Kraken, one of many world’s largest cryptocurrency exchanges, plans to extend CF Benchmarks’ workforce by roughly one-third, surpassing 40 staff to help its growth. Hong Kong has lately launched its first batch of crypto ETFs, together with Bitcoin and Ether merchandise from Harvest International Investments and a partnership between HashKey Capital and Bosera Asset Administration. Bloomberg Intelligence estimates that these funds in Hong Kong may accumulate round $1 billion within the subsequent two years, doubtlessly posing competitors for US Bitcoin merchandise.
CF Benchmarks expects vital development alternatives for crypto ETFs past Hong Kong, with potential expansions to different international locations corresponding to South Korea and Israel. CEO Sui Chung anticipates that South Korea’s embrace of ETFs as a long-term financial savings choice and excessive digital asset adoption charges may make it a main marketplace for crypto ETFs. The corporate licenses benchmarks to funds, prices charges primarily based on AUM development, and is actively collaborating with new ETFs in Hong Kong. Regardless of preliminary lackluster buying and selling volumes, CF Benchmarks is optimistic in regards to the future prospects of the crypto ETF market and believes that the business has the potential to develop considerably within the coming years.