May 10, 2024
By Sharan Kaur Phillora
Hong Kong has introduced its first ETF liquidity fund, valued at $1 billion HKD (approximately $128 million USD), to boost its emerging ETF market. The initiative, led by LD Capital, Antalpha Ventures, and Highblock, aims to enhance liquidity and stability in the market.
Here’s what we know:
The fund’s launch aligns with the Securities and Futures Commission’s approval of six new Hong Kong-listed ETFs, which started trading on April 30. These include Bitcoin and Ethereum spot ETFs managed by ChinaAMC, Harvest Global, and Bosera International. On their first day, these ETFs saw a trading volume close to $100 million HKD.
The liquidity fund will provide market-making services to these ETFs, acting as both a buyer and seller to ensure trades can occur without delays. This role helps prevent the price swings that often happen when large amounts of money enter or leave the market.
LD Capital contributes its experience in blockchain investments, while Antalpha Ventures brings insights from its background in digital asset mining hardware, supported by Bitmain. Highblock Limited adds its expertise in quantitative trading and digital asset operations licensed in Hong Kong.
This new fund is expected to raise investor confidence in Hong Kong’s ETF market by minimizing liquidity risks and enhancing market stability, helping the city advance its position as a key player in the global financial landscape.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.