Harvest Global Investments, a Chinese fund company and one of the issuers of Hong Kong’s first spot Bitcoin and Ethereum exchange-traded funds (ETFs), has confirmed plans to potentially open these funds to mainland Chinese investors via the Hong Kong Stock Connect. This development could significantly expand the investor base and have a significant impact on the cryptocurrency market in Asia.
Harvest CEO eyes mainland access for Hong Kong Bitcoin ETF
Currently, Harvest Global offers Bitcoin and Ether ETFs in Hong Kong, with these products allowing direct investment in the respective cryptocurrencies. The possibility of including these ETFs in the ETF Connect program, which is part of the broader framework Stock Connect Initiative launched in 2014 to connect Hong Kong to mainland Chinese exchanges, was discussed by Harvest CEO Han Tongli at the Bitcoin Asia conference.
Han said: “We do not rule out applying for our ETFs to be included in the Connect program, provided everything goes well over the next two years. »
The move to integrate crypto investments into Stock Connect could be a significant step, given the previously restricted access to these products for investors on the continent. Hong Kong’s approach to regulating cryptocurrencies has been more open than that of mainland China, where most commercial transactions crypto activities are prohibitedbut trade and ownership by individuals remains a legal gray area.
Despite the innovative nature of these spot crypto ETFs and their ability to provide direct exposure to cryptocurrencies rather than derivatives or shares of companies linked to digital currencies, initial trading volumes have been disappointing relative to the market American. According to Han, this is partly due to the market’s cautious view of Hong Kong’s virtual asset policies and their implications for the future of these ETFs.
Han noted during a panel at the Bitcoin Asia conference that the local market could potentially double the size of U.S. products, underscoring the strategic importance of Hong Kong as a more neutral ground with broader appeal in Asia. He attributed the slow start to various factors, including market doubts over Hong Kong’s commitment to becoming a crypto hub, saying: “People are still skeptical about Hong Kong’s status as an (administrative) region ) special. It’s located in China and a lot of people don’t want to see Hong Kong become more successful, for one reason or another.
In his discussion, Han also highlighted the competitive advantages of Hong Kong crypto products, such as the ability to subscriptions in kind — buy ETFs directly with Bitcoin and Ether — and temporarily waive management fees to attract investors. These features, along with potential inclusion in Stock Connect, are seen as key to gaining traction and establishing Hong Kong as a key player in the global cryptocurrency market.
At press time, BTC was trading at $62,754.
Featured image created with DALL·E, chart from TradingView.com
