The CEO of Harvest thinks that access to crypto ETFs in mainland China may be made possible by the Hong Kong-mainland China ETF bridge programme. The CEO of Harvest, a Hong Kong-based exchange-traded fund (ETF) that tracks Bitcoin spot prices, wants mainland Chinese investors to be able to purchase the Bitcoin ETF.
Han Tongli, the CEO and chief investment officer of Harvest, is thinking about ways to make Harvest’s Bitcoin and Ether ETFs available to investors in mainland China. Offering its products via Hong Kong’s ETF Connect structure would make that feasible, according to a May 9 article in The South China Morning Post.
The China Securities Regulatory Commission and the Securities and Futures Commission gave their approval for the ETF Connect before it was introduced in 2022. The instrument is intended to facilitate communication and cooperation between Hong Kong and the Chinese mainland, provide a range of options for asset allocation, and encourage liquidity.
Harvest does not discount the possibility of submitting an application to have its ETFs included in the ETF Connect, provided that “everything goes smooth and well” over the course of the following two years. CEO Tongli stated.
Given that China has a sizable investor base, the possible addition of Bitcoin and Ether ETFs to the ETF Connect programme may act as a significant positive catalyst for the cryptocurrency markets. But since local authorities have long maintained a very restricted stance towards cryptocurrencies like Bitcoin, it is unclear whether the Chinese government would welcome such an opportunity for its residents.
The Stock Connect has not included Hong Kong’s 2022-launched Bitcoin and Ether futures-based exchange-traded funds (ETFs). Even before the launch of Bitcoin and Ether ETFs in Hong Kong on April 30, 2024, there has been much discussion over Hong Kong’s capacity to offer investors in mainland China a Bitcoin ETF.
The Hong Kong ETF market is far smaller than the US or mainland China ETF markets, thus many industry analysts didn’t anticipate much market activity from the introduction. Some mainland Chinese corporations with subsidiaries in Hong Kong have 1,400% more assets in the mainland Chinese market than in the local one, according to Bloomberg statistics. Some sources state that the entire Hong Kong ETF market ought to make up 0.6% of the US ETF market.