The CEO of Harvest, a company that offers a Bitcoin exchange-traded fund (ETF) in Hong Kong, is looking to make their Bitcoin ETF available to mainland Chinese investors. Han Tongli is considering options to allow Chinese investors to purchase Harvest’s Bitcoin (BTC) and Ether (ETH) ETFs by offering them through Hong Kong’s ETF Connect framework, according to a report by the South China Morning Post 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. Its purpose is to promote interaction and integration between Hong Kong and mainland China, provide diverse asset allocation options, and enhance liquidity.
Han stated that if everything goes smoothly in the next two years, Harvest would not rule out applying for its ETFs to be included in ETF Connect.
The inclusion of Bitcoin and Ether ETFs in the ETF Connect program could potentially have a significant positive impact on cryptocurrency markets, as China has a large investor base. However, it remains to be seen whether the Chinese government would accept this opportunity, as they have maintained a strict approach towards cryptocurrencies like Bitcoin for many years.
According to the South China Morning Post, Hong Kong’s Bitcoin and Ether futures-based ETFs, which were launched in 2022, have not been included in Stock Connect.
The ability of Hong Kong to offer mainland Chinese investors a Bitcoin ETF has been a topic of interest even before the launch of Bitcoin and Ether ETFs in Hong Kong on April 30. Industry analysts did not expect much market activity from the launch due to the significantly smaller size of the Hong Kong ETF market compared to the United States and mainland China.
According to Bloomberg data, some Hong Kong-based subsidiaries of mainland Chinese companies have 1,400% more assets in the mainland Chinese market than in the local one. It is estimated that all Hong Kong ETFs account for only 0.6% of the U.S. ETF market.
In response to the news, Binance, a cryptocurrency exchange, criticized a recent article by the Wall Street Journal and highlighted the potential impact of Hong Kong’s crypto ETFs, stating that they could reach a value equivalent to $50 billion.