The CEO of CF Benchmarks, a subsidiary of Kraken, is optimistic about the future of crypto exchange-traded funds (ETFs) in Hong Kong, predicting that they will surpass $1 billion in assets under management (AUM) by the end of 2024. CF Benchmarks, based in London, currently oversees approximately $24 billion in AUM in the crypto benchmarking market, focusing on bitcoin products such as BlackRock’s IBIT. Despite a slow start in Hong Kong, the company is collaborating with new ETFs in the region and expects significant growth.
CF Benchmarks also sees potential for crypto ETFs to expand to other countries such as South Korea and Israel, noting the high adoption rates for digital assets in those regions. The introduction of US ETFs earlier this year led to a record high for Bitcoin, but since then, there has been a decline in investor demand for these funds. Despite this, CF Benchmarks anticipates that Hong Kong products could reach $1 billion in AUM by the end of 2024, providing substantial revenue growth for the company.
Headquartered in London, CF Benchmarks expects revenue to grow in the “mid-double digits” this year, reaching around £6 million ($7.5 million) in 2022. To support its expansion, the company plans to increase its workforce by one-third. Kraken, one of the world’s largest cryptocurrency exchanges, acquired CF Benchmarks in 2019 for a nine-figure sum, providing significant revenue from Bitcoin pricing for derivatives on the Chicago Mercantile Exchange.
Hong Kong recently launched its first batch of ETFs focused on cryptocurrencies, offering competition to popular Bitcoin products in the US. Harvest Global Investments Ltd. and a partnership between HashKey Capital Ltd. and Bosera Asset Management (International) Co. listed Bitcoin and Ether ETFs in the city, with estimates suggesting that these funds could accumulate around $1 billion over the next two years. Overall, CF Benchmarks remains optimistic about the future of crypto ETFs, both in Hong Kong and globally, as investor interest in digital assets continues to grow.
