Mainland Chinese Investors to Remain Excluded from Hong Kong's Bitcoin, Ether ETFs
Summary:
The upcoming launch of spot Bitcoin and Ether exchange-traded funds (ETF) in Hong Kong will not open up the crypto market for investors in mainland China, according to Bloomberg analyst Jack Wang. Despite approval for these ETFs in Hong Kong and the involvement of Chinese asset managers, existing regulations prevent mainland China investors from participating. This underlines the significant difference in the scale of the US, mainland China and Hong Kong ETF markets.
Bitcoin (BTC) and Ether (ETH) exchange-traded funds (ETF), set to launch in Hong Kong, won't be accessible for investors in mainland China, as per Bloomberg analyst, Jack Wang. The green light given for BTC and ETH ETFs in Hong Kong has led three Chinese asset managers - China Asset Management, Harvest Global Investments, and Bosera, to initiate spot crypto ETFs via their Hong Kong subsidiaries on April 30. Despite these ETF issuers' strong connection with mainland China, they will remain unable to deliver Bitcoin or Ether exposure to investors in this region.
Wang explained during an April 24 Bloomberg webinar focused on crypto ETFs that mainland China's citizens wouldn't be eligible to participate in this. He made reference to a declaration from the Chinese State Council in September 2021, prohibiting any financial institution from account creation, funds transfer, or providing clearance for crypto transactions.
As per Wang, Chinese investors won't be interacting with this product in the near future, given that their trade applications will likely be directly rejected by brokers. He is certain that the launch of spot Bitcoin and Ether ETFs in Hong Kong won't have a positive effect on mainland China's regulatory framework nor will it pave the way for Chinese investors to the crypto market.
Thomas Zhu, the head of digital assets at China AMC in Hong Kong, commented that the ability of mainland Chinese investors to buy crypto ETFs in Hong Kong relies on the "introduction of upcoming regulatory changes."
He mentioned that regulators in both mainland China and Hong Kong have been working since 2014 to form Mainland-Hong Kong Stock Connect, which allows mainland investors to directly trade eligible Hong Kong stocks and ETFs.
However, amidst increasing hope about the upcoming launch of crypto ETFs in Hong Kong, Bloomberg analyst James Seyffart indicated that Bitcoin ETFs in the United States have surpassed all ETFs in Hong Kong in terms of assets. He stated that the U.S. ETF market has nearly $9 trillion in assets while the entire Hong Kong ETF market is worth around $50 billion. Meanwhile, mainland China ETFs stand at around $325 billion, showing a considerable difference in size and impact.
Published At
4/26/2024 4:57:39 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.