David Lawant will keep supporting Hong Kong crypto ETFs.
The institutional crypto premier brokerage FalconX's head of research is entitled to be pessimistic on the instruments.
The US exchange-traded funds in spot Bitcoin and Ether handle over $57 billion, while Hong Kong's manage $290.6 million.
Some days, the six funds have no net inflows.
South Korea and other Asian markets are unlikely to approve Bitcoin ETFs soon.
‘ETF flows often slow after a big debut, then increase steadily.’
FalconX's David Lawant
Lawant still thinks Hong Kong ETFs may reach $1 billion in assets by year's end.
By late 2025, it may be more feasible. I wouldn't rule anything out since crypto is fast-paced, Lawant told DL News.
“Compared to other countries, the numbers will be small. Given the scale of the Asian market and its relevance to the crypto ecosystem, I think it may go much higher, he added.
Since its 2018 launch, FalconX has traded over $1 trillion in digital assets. The business assists US Bitcoin ETF sponsors with marketmaking and liquidity as a premier brokerage.
A major barrier to greater expansion is regulatory clarity.
ETFs have days without flows.
Lawant seems unconcerned about the slowness.
“ETF flows often slow after a strong launch, then build steadily over time, especially in low market volatility — as we've seen in recent months,” Lawant added.
However, regulatory ambiguity remains a major obstacle.
In July, Hong Kong-based OSL CEO Patrick Pan told DL News that regulatory approvals, particularly for Ethereum staking, might boost the ETF industry.
The first crypto ETFs in Hong Kong were launched by OSL, ChinaAMC, and Harvest Global.
Pan recognized that the first reaction was disappointing but hoped that future products like staking may boost growth.
Pan claimed several funds and crypto exchanges are negotiating with the SEC.
Still, many obstacles remain.
A major issue is the absence of mainland Chinese funding, which is unlikely to change soon given China's crypto investment position.
Locally listed ETFs are less appealing since many Hong Kong investors may access US markets directly.
ETF infrastructure takes years to create, but more institutions are offering client access.
Mox, a Standard Chartered-backed digital bank, said in early August that it will integrate crypto ETFs to its user app and direct crypto investing.
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