Hong Kong issuer seeks spot Bitcoin ETF for mainland China

Harvest CEO believes the Hong Kong-mainland China ETF bridge program could enable crypto ETF access in mainland China.

The CEO of Harvest, the issuer of a spot Bitcoin (BTC) exchange-traded fund (ETF) in Hong Kong, is looking to make its Bitcoin ETF accessible to mainland Chinese investors.

Harvest CEO and chief investment officer Han Tongli is considering options that would allow mainland China investors to purchase its Bitcoin and Ether (ETH) ETFs. That would be possible by offering its products through Hong Kong’s ETF Connect framework, The South China Morning Post reported on May 9.

The ETF Connect was launched in 2022, and it was approved by the China Securities Regulatory Commission and the Securities and Futures Commission. The tool is designed to promote the interaction and integration of Hong Kong and mainland China, offer diverse asset allocation choices and promote liquidity.

As long as “everything goes smooth and well” in the next two years, Harvest doesn’t rule out the opportunity of applying for its ETFs to be included in the ETF Connect, CEO Tongli said.

The potential inclusion of Bitcoin and Ether ETFs in the ETF Connect program could be a massive bullish trigger on cryptocurrency markets, as China has a large investor pool. But it’s yet to be seen whether the Chinese government would accept such an opportunity for its citizens, as local authorities have maintained a very restrictive approach toward cryptocurrencies like Bitcoin for many years.

According to SCMP, Hong Kong’s Bitcoin and Ether futures-based ETFs — launched in 2022 — have not been included in the Stock Connect.

Related: Is China warming up to Bitcoin ETFs? BTC investor’s reply sparks curiosity

Hong Kong’s capability to provide mainland China investors with a Bitcoin ETF has been a hot issue even before the launch of Bitcoin and Ether ETFs in Hong Kong on April 30, 2024.

Many industry analysts didn’t expect a lot of market action from the launch because the Hong Kong ETF market is significantly smaller than the one in the United States or mainland China.

According to Bloomberg data, some Hong Kong-based subsidiaries of mainland China companies have 1,400% more assets in the mainland Chinese market than in the local one. According to some sources, all Hong Kong ETFs should account for 0.6% of the U.S. ETF market.

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