Hong Kong crypto ETFs to open new door for mainland Chinese investors

Spot
crypto
exchange-traded
funds
(ETFs)
introduced
on
the
Hong
Kong
stock
exchange
have
paved
the
way
for
a
future
wave
of
Chinese
investors,
according
to
industry
experts.

In
an
interview
with
Bloomberg
TV,
Yimei
Li,
CEO
of
China
Asset
Management,
mentioned
that
the
Tuesday
launch
of
the
spot
Bitcoin
and
Ether
ETFs
“opens
the
door
for
numerous
RMB
[Chinese
yuan]
holders”
looking
for
alternative
investments.

China
Asset
Management
is
one
of
three
ETF
issuers,
together
with
Harvest
Global
Investments
and
Bosera
Asset
Management,
that
introduced
a
cryptocurrency
product
on
the
Hong
Kong
Stock
Exchange
on
April
30.

Li

told
Bloomberg
TV
that
she
believed
a
“new
opportunity”
for
mainland
Chinese
investors
to
“participate
in
this
process”
will
arise
in
the
future.

She
emphasized
the
potential
expansion
of
asset
options
for
domestic
investors
as
market
accessibility
improves.

Crypto
trading
is
still
prohibited
in
mainland
China,
and
the
new
ETFs
are
only

available
to
Hong
Kong
residents
at
the
time.

Han
Tongli,
CEO
of
Harvest
Global,
mentioned
that
regulators
are
closely
observing
the
development
of
these
ETFs
to
manage
potential
risks
and
may
consider
market
expansion
based
on
risk
assessments.

In
an
April
30

post
on
X,
Jan.
3
CEO
and
Bitcoin
pioneer
Samson
Mow
stated
that
ETFs
in
Hong
Kong
“are
going
to
be
big,”
with
“long-term
implications
that
are
massive.”

“There
is
really
nothing
else
for
Chinese
investors
to
put
their
money
into
at
this
time.”

The
comments
follow
a
post
by
Bitcoin
environmentalist
Daniel
Batten,
who
noted
the
decline
of
all
three
Chinese
stock
exchanges
in
2023
and
the
ongoing
instability
in
the
real
estate
market.

Per
Barron’s

report
last
week,
all
major
Chinese
real
estate
data
indicators
performed
poorly
or
declined
during
the
first
quarter.

Most
Chinese
ultra-high-net-worth
individuals
can
invest
in
Hong
Kong’s
cryptocurrency
ETFs,
he
said.

At
a
press
conference
on
April
29,
Zhu
Haokang
from
China
Asset
Management
confirmed
that,
as
of
now,
mainland
Chinese
investors
are
prohibited
from
investing
in
the
new

Hong
Kong
ETFs.

“Hong
Kong’s
qualified
investors,
institutional
investors,
retail
investors,
and
international
investors
who
meet
the
regulations
can
all
invest
in
cryptocurrency
spot
ETFs,”
he
said.

Fund
issuers
and
investors
anticipate
that
this
will
spark
a
new
wave
of
capital
inflows
from
the
mainland
in
the
future.

Despite
the
impending
debut
of
the
Hong
Kong
crypto
spot
exchange-traded
fund
(ETF),
crypto
markets
were
down
across
the
board
on
Tuesday
morning,
with
Bitcoin
(BTC)
hovering
above
$63,000
as
investor
excitement
remained
muted.

BTC
fell
during
the
day
from
$64,000
during
the
weekend,
momentarily
falling
to
$61,800
before
recovering
to
approximately
$63,000
in
the
US
afternoon.

The
largest
cryptocurrency
by
market
value
was
recently
changing
hands
at
$61,714,
down
around
1%
in
the
last
24
hours,
outperforming
the
global
crypto
market,
which
fell
2%
during
the
same
period.

Most
altcoin
majors
also
lost
their
weekend
gains,
with
ether
(ETH),
Solana
(SOL),
and
dogecoin
(DOGE)
falling
from
4%
to
6%.

Even
though
spot-based
bitcoin
and
ether
ETFs
in
Hong
Kong
will
begin
trading
at
local
times
on
Tuesday
morning,
the
upcoming
launch
has
not
generated
the
same
level
of
excitement
as
the
U.S.
spot
bitcoin
ETFs.
Notably,
BTC
roughly
doubled
in
price
in
the
three
months
preceding
its
January
11
debut,
and
large
inflows
helped
push
BTC
above
$73,000
in
March.

Defying
the
subdued
anticipation,
an
executive
of
ChinaAMC,
one
of
the
three
issuers
of
the
new
Hong
Kong-listed
spot
ETFs,
reportedly
stated
during
a
press
briefing
that
the
first-day
sale
of
shares

might
exceed
the
$125
million
debut
in
the
United
States,
alluding
to
the
new
products’
initial
funding.

“I
am
very
confident
that
the
initial
listing
scale
of
Hong
Kong’s
virtual
asset
spot
ETF
can
exceed
the
issuance
scale
on
the
first
day
of
the
United
States,”
said
Zhu
Haokang.