Cryptocurrency ETF Investment Tips

Previous month's articleDevelopments and Opportunities in the Hong Kong ETF MarketMentioning the many different types of ETFs currently available for Hong Kong stocks, today we will introduce you to some of the most popular cryptocurrency ETFs in recent times. Learn about the difference between cryptocurrency ETF futures and futures, and what mindset investors should use to participate in these cryptocurrency investment opportunities. Investors are no longer limited to shares related to the concept of investing in US stocks, such as $Coinbase(COIN.US)$ $Marathon Digital(MARA.US)$either $Digital Currency(BK20010)$And so on.

On April 30 of this year, the HKEx successfully launched its first batch of cryptocurrency spot ETF (Exchange-Traded Fund). The establishment of these ETFs is not only a key step in expanding the product range and increasing market depth, but also means that investors will invest directly in physical cryptocurrencies. While ETFs based on cryptocurrency futures have emerged on the Hong Kong market in the past, the launch of spot ETFs undoubtedly presents new opportunities for investors eager for a more direct exposure to the cryptocurrency market.

Differences between spot ETFs and futures ETFs and what investors should pay attention to

A spot ETF is inherently different from a futures ETF in terms of mechanism. Spot ETFs hold cryptocurrencies directly, and their value is directly linked to the market price of the cryptocurrency held. IN CONTRAST, FUTURES ETFS TRACK CRYPTOCURRENCY FUTURES CONTRACTS WHOSE VALUE IS INFLUENCED BY FUTURES MARKET PREMIUMS OR DISCOUNTS AND ROLLING COSTS, WHICH CAN LEAD TO LARGER DEVIATIONS FROM SPOT MARKET PRICES WHEN HOLDING LONG-TERM. For investors, choosing a spot or futures ETF requires considering investment objectives, the impact of market volatility on spot and futures spreads, and preferences for holding physical assets and derivatives.

The above is an academic point of view, and the following is a brief summary that the author simply makes:

The benefit of spot crypto ETFs is that investors can directly hold the associated cryptocurrency through the ETF, saving rollover costs; the cost will be the risk involved, the cost and liquidity risk of storing the associated cryptocurrency.

The benefits of futures crypto ETFs are that holding the relevant ETF through derivatives can reduce the risk of trading opponents; while the price is the cost of long line holding (where long lines are involved over several years), which can lead to deviations when holding and tracking assets for long periods.

Cryptocurrency Investment Opportunities

Cryptocurrencies as an emerging asset class, their price volatility and potential high returns have caught the attention of many investors. Over time, the cryptocurrency market has matured, and ETF products for cryptocurrencies are also constantly innovating and developing. These ETF products may include combinations of multiple cryptocurrencies, provide exposure to specific technologies or ecosystems, and may even include investments in cryptocurrency-related stocks. These products may be an attractive option for investors looking to reduce the risk of volatility in a single asset by diversifying investments. At the same time, the Hong Kong Securities and Futures Commission (SFC)'s regulatory stance on cryptocurrency trading is also evolving, and it is increasingly strict on related products and funds, which means that investing in crypto ETFs in Hong Kong can also gain regulatory exposure while enjoying the potential benefits of the crypto market. Protection of.

How to Find Related Topics in Futubull

Futubull is not updating and strengthening the features related to ETFs, and investors can search for signs in Markets->ETF->Hong Kong->TopicsETF->Find Cryptocurrency Futures ETFs and Crypto-Futures ETFs.

To summarize, the most important factor for an ETF to consider when it comes to investing, is not necessarily management fees, but the company's ability to track the assets involved is the most important. Secondly, if investors want to engage in short-line operations, it is best to focus on liquidity risk, so trading on individual ETFs is a top consideration; if investors want to deploy on a long line, they should pay attention to the issuer's brand and operational capabilities in addition to tracking the performance of asset prices. and market positioning.

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Chief Analyst of Futu Securities Liang

(The author is a license holder of the Securities Regulatory Commission, and its contacts do not have financial interests in the issuer of the proposed shares mentioned above)

(The design image displayed on the screen is for illustrative purposes only and does not constitute any investment advice or guarantee)

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On this page

Differences between spot ETFs and futures ETFs and what investors should pay attention to
Cryptocurrency Investment Opportunities
How to Find Related Topics in Futubull