Hong Kong Issuer Seeks Spot Bitcoin ETF for Mainland China

The CEO of Harvest, a Hong Kong spot Bitcoin (BTC) exchange-traded fund (ETF) issuer, wants to make Bitcoin ETFs accessible to mainland Chinese investors.

Harvest CEO and Chief Investment Officer Han Tongli is considering options for mainland Chinese investors to purchase Bitcoin and Ethereum (ETH) ETFs. This will be possible by offering its products through Hong Kong’s ETF Connect framework, the South China Morning Post reported on May 9.

ETF Connect was launched in 2022 and has been approved by the China Securities Regulatory Commission and the Securities and Futures Commission. The tool is designed to facilitate interaction and integration between Hong Kong and mainland China, provide a variety of asset allocation choices, and promote liquidity.

Over the next two years, “as long as everything goes well,” Harvest is not ruling out the opportunity to apply for ETFs to be included in ETF Connect, CEO Tongli said.

The potential inclusion of Bitcoin and Ethereum ETFs in the ETF Connect program could provide a huge boost to the cryptocurrency market as China has a large pool of investors. However, it is not yet known whether the Chinese government will embrace such opportunities for its citizens, as local authorities have maintained a very restrictive approach to cryptocurrencies such as Bitcoin for several years.

Hong Kong-based Bitcoin and Ethereum futures-based ETFs launched in 2022 are not included in Stock Connect, according to SCMP.

Related: Is China Interested in Bitcoin ETFs? BTC investor’s answer arouses curiosity

Hong Kong’s ability to offer Bitcoin ETFs to mainland Chinese investors has been a hot topic even before the launch of Bitcoin and Ethereum ETFs in Hong Kong on April 30, 2024.

Many industry analysts did not expect much market reaction following the launch as the Hong Kong ETF market is much smaller than the US or mainland China.

Some Hong Kong-based subsidiaries of mainland Chinese companies hold 1,400% more assets in the mainland market than in the local market, according to Bloomberg data. According to some sources, any Hong Kong ETF should account for 0.6% of the US ETF market.

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