Mainland Chinese investors cannot buy Hong Kong Bitcoin ETFs
According to Bloomberg data analyst Jack Wang, Hong Kong's upcoming spot bitcoin (BTC) and ether (ETH) exchange-traded funds (ETF) will not open the market to investors in mainland China.
Following Hong Kong's approval of spot BTC and ETH ETFs, three Chinese asset managers, including China Asset Management, Harvest Global Investments and Bosera, filed positions in their Hong Kong branches on April 30.
Although ETF issuers have close ties to mainland China, they cannot provide exposure to Bitcoin or Ether to investors in that jurisdiction.
“Mainland Chinese citizens cannot participate in this,” Wang said during a Bloomberg webinar on the approval of the Hong Kong-based space crypto ETF on April 24.
He cited a September 2021 statement from China's State Council that indicated that no financial institution would be allowed to create accounts, transfer funds or clear any crypto-related transactions.
“So even for the futures-oriented crypto ETF listed in Hong Kong – I tried to set up a trade – the brokers will directly reject the trade,” Wang said, adding that Chinese investors cannot deal with this product. In a short time.
He expressed his belief that the launch of the spot Bitcoin and Ether ETF in Hong Kong would not have any positive impact on the regulatory environment in mainland China and would not open up the crypto market to Chinese investors.
“At least I'd say 100% no,” the analyst said.
According to Thomas Zhu, head of digital assets at Hong Kong-based China Asset Management – or China AMC – the legality of Chinese investors to acquire crypto ETFs in Hong Kong depends on “upcoming regulatory reforms”.
Related: Chinese ‘Crypto Dad' Faces Government Investigation
“As for other products, since 2014, Mainland and Hong Kong regulators have made concerted efforts to establish a Mainland-Hong Kong stock link. Through these trading links, Mainland investors can directly trade eligible Hong Kong stocks and ETFs,” Zhou told Cointelegraph.
While optimistic about the upcoming launch of a spot crypto ETF in Hong Kong, Bloomberg analyst James Seifert noted that bitcoin ETFs in the US have more assets than all ETFs in Hong Kong.
“The US ETF market is about $9 trillion in assets — that's trillion with a ‘T.' Hong Kong's ETF market is around $50 billion. Mainland China EFF is around $325 billion. We're talking about order of magnitude differences in scale and impact,” Seifert wrote in an April 12 X post.
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