Harvest Explores Opening Bitcoin and Ether ETFs to Mainland China via HK's ETF Connect
Summary:
Harvest CEO, Han Tongli, is considering ways to make its Bitcoin and Ether exchange-traded funds (ETFs) available for mainland China investors through Hong Kong's ETF Connect framework. If successful over the next two years, this could significantly stimulate the cryptocurrency market given China's large investor pool. However, it remains uncertain if the Chinese government would endorse such a move due to its traditionally strict stance on cryptocurrencies.
Harvest, a Hong Kong-based company that offers a Bitcoin (BTC) spot exchange-traded fund (ETF), is contemplating ways to make its Bitcoin ETF available to investors in mainland China. Harvest's CEO, Han Tongli, is exploring avenues to enable Chinese investors to purchase his company's Bitcoin and Ether (ETH) ETFs, potentially through the use of the Hong Kong ETF Connect framework, as revealed on May 9th in The South China Morning Post.
Last year, the deployment of the ETF Connect, which offers a broad spectrum of asset allocation choices and supports liquidity, received approval from China's governing financial institutions, namely, the China Securities Regulatory Commission and the Securities and Futures Commission. The concept behind the tool is to foster synergy between Hong Kong and mainland China’s financial systems.
If things progress smoothly, within two years, Harvest envisages applying to have its ETFs integrated into the ETF Connect program, according to CEO Tongli. The integration of these Bitcoin and Ether ETFs could bolster the cryptocurrency market significantly because of China's vast pool of investors. However, it remains uncertain if the Chinese government would approve such a step given their historically stringent stance regarding cryptocurrencies such as Bitcoin.
In contrast to this proposed move, the Stock Connect does not currently include any Hong Kong-based Bitcoin and Ether futures-based ETFs—launched last year—that might be of interest to investors, as reported by SCMP.
Before Hong Kong launched its Bitcoin and Ether ETFs on 30 April 2024, there were already heated discussions concerning its ability to offer mainland China investors a Bitcoin ETF. The launch didn't initially generate significant market excitement, as analysts consider Hong Kong's ETF market to lack the scale of its American or Chinese counterparts.
Bloomberg data indicates that some Hong Kong-based branches of mainland Chinese companies maintain significantly more assets in the Chinese market compared to their local competition. Some industry insiders argue that relative to the behemoth that is the U.S. ETF market, Hong Kong-based ETFs only account for a mere 0.6% of the U.S. market share.
Published At
5/10/2024 5:55:25 PM
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