Hong Kong issuer seeks position Bitcoin ETF for mainland China

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

Harvest CEO and Chief Investment Officer Han Tonli is considering options for Chinese investors to buy Bitcoin and Ether (ETH) ETFs. That could be by offering the products in Hong Kong's ETF link framework, the South China Morning Post reported on May 9.

The ETF relationship was launched in 2022 and has been approved by the China Securities Regulatory Commission and the Securities and Futures Commission. This instrument is designed to promote the interaction and integration of Hong Kong and Mainland China, provide diverse asset allocation choices and promote liquidity.

As long as “everything is smooth and fine” over the next two years, Harvest won't rule out the possibility of applying for its ETFs to be included in the ETF Connection, CEO Tongli said.

Since China has a large pool of investors, the inclusion of Bitcoin and Ether ETFs in the ETF Connect program could be a major trigger for cryptocurrency markets. But it remains to be seen whether the Chinese government will accept such an opportunity for its citizens, because local authorities have maintained a very restrictive approach to cryptocurrencies such as Bitcoin for many years.

According to the SCMP, ETFs based on Hong Kong Bitcoin and Ether futures – which launched in 2022 – are not included in the stock link.

Related: Is China Warming Up To Bitcoin ETFs? The reaction of the BTC investor aroused curiosity

Hong Kong's ability to offer Bitcoin ETFs to mainland Chinese investors has been a hot topic even before the launch of the Bitcoin and Ether ETF in Hong Kong on April 30, 2024.

Hong Kong's ETF market is much smaller than that of the United States or mainland China, so many industry analysts did not expect much market action from the start.

According to Bloomberg data, some Hong Kong subsidiaries of major Chinese companies have 1,400% more assets in the mainland Chinese market than the local ones. According to some sources, all Hong Kong ETFs should account for 0.6% of the US ETF market.

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