The introduction of exchange-traded funds (ETFs) for Bitcoin and Ether in Hong Kong is a significant milestone. However, according to Bloomberg data analyst Jack Wang, this development will not provide new investment opportunities for individuals in mainland China.
Hong Kong recently approved BTC and ETH ETFs, prompting Chinese asset management firms such as China Asset Management, Harvest Global Investments, and Bosera to prepare for the launch of their own crypto ETFs by April 30th, through their subsidiaries in the region.
Despite the close connections between these issuers and mainland China, they do not serve as a gateway for Chinese investors. During a webinar on April 24th, Wang stated, “Mainland Chinese citizens will not be able to participate in this.” This restriction is a result of a directive from the Chinese State Council, which was implemented in September 2021 and prohibits financial institutions from engaging in cryptocurrency-related transactions.
Efforts to trade futures-based crypto ETFs, which are also listed in Hong Kong, have faced obstacles. Wang commented, “Even for the futures-based crypto ETF listed in Hong Kong – in fact, I tried to establish a trade – the brokers will simply directly reject the trade,” underscoring the direct exclusion of Chinese investors from this market.
Wang emphasized that the introduction of Bitcoin and Ether ETFs in Hong Kong will not lead to changes in mainland China’s regulations or open up the cryptocurrency market for Chinese investors. “I would say at least 100% it won’t happen,” Wang stated. However, Thomas Zhu, the head of digital assets at China Asset Management, mentioned the possibility, albeit conditional, that investors from mainland China could eventually acquire these ETFs depending on future regulatory adjustments.
Disclaimer: The views and opinions expressed by the author or anyone mentioned in this article are for informational purposes only and do not constitute financial, investment, or other advice. Investing or trading cryptocurrencies carries a risk of financial loss.
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