Hong Kong Bitcoin investment fund issuer Harvest’s CEO announced plans to open Bitcoin ETF to mainland Chinese investors. Harvest CEO and chief investment officer Han Tongli is considering options that would allow Chinese investors to purchase Bitcoin and Ethereum ETF funds. According to a May 9 report by The South China Morning Post, this could be possible by offering their products through Hong Kong’s ETF Connect.
Ongoing ETF Process in Hong Kong
ETF Connect was launched in 2022 and approved by the China Securities Regulatory Commission and the Securities and Futures Commission. The tool is designed to promote interaction and integration between Hong Kong and mainland China, offer various asset allocation options, and encourage liquidity.
CEO Tongli mentioned that if everything goes well in the next two years, Harvest will not overlook the opportunity to apply for the inclusion of their ETF funds in ETF Connect.
With China having a large pool of investors, the inclusion of Bitcoin and Ethereum ETF funds in the ETF Connect program could potentially trigger a significant rise in the cryptocurrency markets. However, it is still unknown whether the Chinese government will accept such an opportunity for its citizens, as local authorities have long displayed a highly restrictive approach towards cryptocurrencies like Bitcoin.
Notable Details in the ETF Sector
According to SCMP, Hong Kong’s Bitcoin and Ethereum futures-based ETF funds launched in 2022 were not included in Stock Connect. The process of providing Bitcoin ETFs to mainland Chinese investors in Hong Kong was a hot topic even before the launch of Bitcoin and Ethereum ETF funds in Hong Kong on April 30, 2024.
Many industry analysts did not expect much market movement from the launch due to the Hong Kong ETF market being significantly smaller than those of the United States or mainland China. According to Bloomberg data, subsidiaries of mainland Chinese companies based in Hong Kong have 1,400% more assets in the mainland market compared to the local market. Some sources indicate that all Hong Kong ETF funds only make up 0.6% of the US ETF market value.
