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

The launch of spot Bitcoin (BTC) and Ether (ETH) exchange-traded funds in Hong Kong last week has opened up new avenues for Asian traders.

While the first week of trading for Hong Kong-based ETFs was tepid compared to its US counterpart, Hong Kong's proximity to China has made these locations a key talking point over whether ETFs are accessible to mainland Chinese investors.

Richard Byworth, managing partner at SyzCapital and BTC Investor, sparked rumors with his comments that Hong Kong-listed Bitcoin ETFs could soon be accessible to mainland Chinese investors.

Byworth, in his X response to Samson Mou, said he had heard talk that the spot BTC ETF could be added to Stock Connect.

Stock Connect allows eligible investors from one market to access eligible shares on another market via quota. The Shenzhen-Hong Kong Stock Connect, a cross-border investment route, connects the Shenzhen Stock Exchange and the Hong Kong Stock Exchange.

Investors in either market can clear houses to trade stocks in the other market using their respective brokers. The Stock Connect program covers a wide range of stocks but is subject to a daily quota.

While Byworth's words are mere rumours, China's anti-crypto stance has made it a topic of discussion on social media.

Brian Hunjong Paik, co-founder and CEO at SmashFi, has addressed rumors of major Chinese investors potentially acquiring the Hong Kong ETF in the near future.

70% of China's wealth is in real estate and “there are now 100 million empty houses.” CCP needs an alternative asset to address social unrest.

Related: Hong Kong officials recommend self-regulation of city's crypto industry

In another post, Pike outlined several trading arrangements between the Shanghai and Hong Kong markets that allow Chinese investors to invest in BTC ETFs in Hong Kong.

In addition to the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect, the Qualified Domestic Investor (QDII) scheme allows qualified Chinese institutional investors (such as banks, funds and insurance companies) to invest in overseas markets, including Hong Kong. Cong

Another trade agreement between Hong Kong and Mainland China, called the Mutual Recognition Facility (MRF), allows eligible Mainland and Hong Kong funds to be traded in each other's markets.

China has banned Bitcoin mining and foreign crypto exchanges from offering their services to their primary customers in 2021. However, despite blanket bans on crypto-related businesses and services, Chinese courts have deemed BTC legal property in many jurisdictions.

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