- Harvest Global Investments, a Chinese fund house and one of the issuers of Hong Kong’s first spot Bitcoin and Ethereum exchange-traded funds (ETFs), is considering opening these funds to mainland Chinese investors through the Hong Kong Stock Connect.
- This move could significantly impact the cryptocurrency market in Asia by expanding the investor base.
- Harvest CEO Han Tongli discussed the possibility at the Bitcoin Asia conference, stating, “We don’t rule out applying for our ETFs to be included in the connect programme, as long as everything goes smooth and well in the next two years.”
Harvest Global Investments plans to potentially open its Bitcoin and Ethereum ETFs to mainland Chinese investors, potentially expanding the investor base and impacting the cryptocurrency market in Asia.
Harvest CEO Eyes Mainland Access For HK Bitcoin ETF
Harvest Global currently offers Bitcoin and Ether ETFs in Hong Kong, enabling direct investment in these cryptocurrencies. The potential inclusion of these ETFs in the ETF Connect scheme, part of the broader Stock Connect initiative launched in 2014 to link Hong Kong with mainland Chinese exchanges, could significantly expand access to these investment products. This is particularly noteworthy given the more restrictive approach to cryptocurrency regulation in mainland China compared to Hong Kong.
Potential Impact on the Cryptocurrency Market
Despite the innovative nature of these spot crypto ETFs and their ability to offer direct exposure to cryptocurrencies, initial trading volumes have been relatively low compared to the US market. This is partly due to the market’s cautious view of Hong Kong’s virtual asset policies and its implications for the future of these ETFs. However, Han believes that the local market could potentially double the size of the US products, emphasizing the strategic importance of Hong Kong as a more neutral ground with broader appeal in Asia.
Advantages of Hong Kong’s Crypto Products
Han highlighted the competitive advantages of Hong Kong’s crypto products, such as the possibility for in-kind subscriptions — buying ETFs directly with bitcoin and ether — and temporary waiving of management fees to attract investors. These features, along with the potential inclusion in the Stock Connect, are seen as critical to gaining traction and establishing Hong Kong as a key player in the global cryptocurrency market.
Conclusion
The potential inclusion of Harvest Global’s Bitcoin and Ethereum ETFs in the ETF Connect scheme could significantly expand the investor base and impact the cryptocurrency market in Asia. Despite initial low trading volumes, the strategic importance of Hong Kong as a more neutral ground with broader appeal in Asia, along with the competitive advantages of its crypto products, could establish Hong Kong as a key player in the global cryptocurrency market.
