Bitrabo Editorial
Harvest Global Investments, a major Chinese fund company involved in Hong Kong’s pioneer spot Bitcoin and Ethereum exchange-traded funds (ETFs), has solidified its plans to potentially allow mainland Chinese investors access to these funds through the Hong Kong Stock Connect. Should this come to fruition, it has the potential to significantly broaden the investor base and make a substantial impact on the cryptocurrency market in Asia.
Expansion of HK Bitcoin ETF Access to Mainland China by Harvest CEO
Presently, Harvest Global provides Bitcoin and Ether ETFs in Hong Kong, facilitating direct investment in these digital assets. The prospect of incorporating these ETFs into the ETF Connect scheme, a part of the broader Stock Connect launched in 2014 to connect Hong Kong with mainland Chinese exchanges, was deliberated by Han Tongli, the CEO of Harvest, at the Bitcoin Asia conference.
Han expressed, “We are considering applying for our ETFs to be part of the connect program, provided everything progresses smoothly in the next couple of years.”
The proposal to integrate crypto investments into the Stock Connect marks a significant move, especially considering the limited access mainland investors have had to such products in the past. While Hong Kong has maintained a more open stance on cryptocurrency regulations unlike mainland China, where most commercial crypto activities are prohibited, individual ownership and trading remain legally ambiguous.
Despite the innovative nature of these spot crypto ETFs offering direct exposure to cryptocurrencies instead of related company stocks or derivatives, the initial trading volumes have not been impressive compared to the US market. Han attributes this partly to the market’s reserved approach due to uncertainties surrounding Hong Kong’s virtual asset policies and their implications on the ETFs’ future.
Han, speaking during a Bitcoin Asia conference panel, suggested that the local market could potentially double the size of US products, underscoring Hong Kong’s strategic significance as a more neutral ground with broader appeal in Asia. He pointed out various factors contributing to the slow start, including market skepticism towards Hong Kong’s aspirations to become a crypto hub, stating, “There are doubts regarding Hong Kong’s position as a special region. Being situated in China, not everyone wishes to witness Hong Kong’s further success for various reasons.”
In his remarks, Han highlighted Hong Kong’s crypto products’ competitive advantages, such as the potential for in-kind subscriptions—directly purchasing ETFs with bitcoin and ether—along with the temporary waiving of management fees to attract investors. These characteristics, alongside the potential inclusion in the Stock Connect, are deemed crucial for gaining momentum and positioning Hong Kong as a key player in the global cryptocurrency sphere.
Bitcoin was trading at $62,754 at the time of publication.