Mainland Chinese citizens cannot purchase Hong Kong’s spot Bitcoin and Ether exchange-traded funds (ETFs) following the crypto ban in mainland China.
On April 30, three Chinese asset managers—China Asset Management, Harvest Global Investments, and Bosera—established spot crypto ETFs via their Hong Kong subsidiaries after Hong Kong authorizes spot BTC and ETH ETFs.
Despite maintaining solid connections with mainland China, the ETF issuers must refrain from offering exposure to Bitcoin or Ether for investors in that jurisdiction.
“Citizens of the People’s Republic of China will be unable to participate,” Wang stated on April 24 during a Bloomberg webinar regarding Hong Kong’s approval of spot crypto ETFs.
He cited a September 2021 statement from the Chinese State Council, which prohibited financial institutions from facilitating crypto-related transactions, including account creation, fund transfers, and clearance.
“Therefore, even for the Hong Kong-listed futures-based crypto ETF — I attempted to set a trade — the brokers will reject the trade immediately,” Wang explained, adding that Chinese investors will have no contact with this product shortly.
Furthermore, he conveyed assurance that introducing spot Bitcoin and Ether ETFs in Hong Kong would not yield any favorable consequences for the regulatory landscape in mainland China and would not grant Chinese investors access to the cryptocurrency market.
“At the very least, I would say it is not going to occur,” the analyst stated.
Thomas Zhu, director of digital assets at China Asset Management (China AMC) in Hong Kong, states that the ability of mainland Chinese investors to purchase crypto ETFs in Hong Kong is contingent on the “implementation of forthcoming regulatory modifications.”
“Regarding additional products, the Mainland and Hong Kong regulators collaborated in 2014 to establish the Mainland-Hong Kong Stock Connect. “Mainland investors can trade eligible Hong Kong stocks and ETFs directly through these trading links,” Zhu told Cointelegraph.
As optimism surrounding the forthcoming introduction of spot crypto ETFs in Hong Kong increases, James Seyffart, an analyst at Bloomberg, notes that the combined assets of Bitcoin ETFs in the United States surpass those of all ETFs in Hong Kong.
“The assets of the U.S. ETF market are nearly $9 trillion; that’s trillion with a capital ‘T.'” Approximately $50 billion comprises the entire Hong Kong ETF market.
The estimated value of Mainland China ETFs is $325 billion. Seyffart wrote on April 12 in an X post, “We are discussing differences in size and impact that are literal orders of magnitude apart.”
