Hong Kong's foray into crypto ETFs might have started slow, but don't count them out just yet. CF Benchmarks, a subsidiary of Kraken, predicts these new funds could turn things around, amassing over $1 billion in assets under management (AUM) by year-end.

This London-based company acts as a crypto ETF reference data specialist. Think of them as the scorekeepers for crypto funds, focusing on giants like BlackRock's IBIT Bitcoin ETF. With $24 billion in AUM currently under their belt, they're a major player in the game.

Despite a lukewarm launch, CF Benchmarks is diving headfirst into Hong Kong's new ETF scene, according to a recent Bloomberg report. They license their benchmarks to these funds, collecting fees that grow alongside the AUM. In short, a thriving Hong Kong ETF market means good business for CF Benchmarks.

But Hong Kong isn't the only market on their radar. CF Benchmarks sees potential for crypto ETFs to take off in South Korea and Israel. South Korea's love for long-term savings vehicles like ETFs and their embrace of digital assets make them a prime candidate.

Remember how CF Benchmarks predicted US spot-Bitcoin ETFs using their indexes would reach $5 billion in assets this year? Well, that estimate got blown out of the water, reaching over four times that amount! They believe Hong Kong could follow a similar trajectory, potentially exceeding $1 billion in AUM by the close of 2024.

While the US ETF launch saw Bitcoin skyrocket to a record high earlier this year, it's come down to earth since. Investor enthusiasm cooled, leading to a recent outflow for US ETFs, bringing their total AUM down to around $47 billion.

Despite this short-term dip, CF Benchmarks remains optimistic. They project "mid-double digit" revenue growth this year, with plans to expand their team by a third, exceeding 40 employees. Remember, Kraken, one of the biggest crypto exchanges globally, acquired them back in 2019 for a hefty sum.

Hong Kong's crypto ETF launch marks a potential challenger to the US giants. While the initial steps might have been shaky, CF Benchmarks and industry experts believe these new funds have the potential to become a billion-dollar success story within the next two years.