Han Tongli, the CEO of Harvest, the company behind a recently launched spot Bitcoin exchange-traded fund (ETF) in Hong Kong, is exploring avenues to extend access to mainland Chinese investors. Harvest aims to offer its Bitcoin ETF, along with Ethereum ETFs, to investors in mainland China through the Hong Kong ETF Connect framework, as reported by the South China Morning Post on May 9.
Launched in 2022, ETFPass has received approval from the China Securities Regulatory Commission and the China Securities Regulatory Commission. This platform is designed to enhance interaction and integration between Hong Kong and mainland China, providing diverse asset allocation options and fostering liquidity.
Han Tongli expressed openness to the possibility of having Harvest's ETFs included in the ETF Connect program, contingent on favorable developments over the next two years. Given China's substantial investor base, the inclusion of Bitcoin and Ethereum ETFs in ETF Connect could potentially catalyze a bullish trend in the cryptocurrency market. However, the extent to which the Chinese government embraces this opportunity remains uncertain, considering its historically stringent stance on cryptocurrencies like Bitcoin.
Despite the launch of Bitcoin and Ethereum ETFs in Hong Kong on April 30, 2022, these offerings have yet to be integrated into the Shanghai-Hong Kong Stock Connect, as reported by the South China Morning Post. The prospect of extending a Bitcoin ETF to mainland Chinese investors has been a topic of interest even prior to the Hong Kong ETF's introduction.
Although the Hong Kong ETF market is comparatively smaller than its counterparts in the U.S. and mainland China, industry analysts remain cautious about its potential impact on the market. Bloomberg data indicates that the Hong Kong subsidiaries of certain mainland Chinese firms hold assets in the mainland market that surpass their holdings in the local Hong Kong market by up to 1,400%.
Overall, while there is anticipation surrounding the extension of Bitcoin and Ethereum ETFs to mainland Chinese investors, the actual market impact may hinge on various factors, including regulatory developments and investor sentiment.
