There have been speculations regarding how Chinese investors from the mainland would gain access to the newly launched Bitcoin (BTC) and Ether (ETH) exchange-traded funds (ETFs) in Hong Kong.
While these ETFs had a relatively poor reception during their first trading week compared to their U.S. counterparts, their launch has attracted the attention of traders in Asia who see them as new investment opportunities.
Richard Byworth, managing partner at SyzCapital and BTC investor, hinted at the possibility of mainland China investors accessing Bitcoin ETFs listed in Hong Kong.
Byworth’s comments, made in response to Samson Mow, suggested that these spot Bitcoin ETFs could potentially be added to Stock Connect, a cross-border investment route linking the Shenzhen Stock Exchange and the Hong Kong Stock Exchange. The Stock Connect program offers access to a wide range of stocks but has a daily quota limit.
While these remarks from Byworth remain speculative, China’s firm anti-crypto stance has fueled discussions on social media. Brian HoonJong Paik, co-founder and chief operating officer at SmashFi, weighed in on the rumours, highlighting the potential for Chinese investors to seek alternative assets given the country’s heavy real estate investments and concerns about social unrest.
In another post, Paik identified several trade arrangements, including the Shanghai-Hong Kong Stock Connect, the Shenzhen-Hong Kong Stock Connect, and the Qualified Domestic Institutional Investor scheme, which could facilitate Chinese investment in spot BTC ETFs in Hong Kong. Additionally, the mutual recognition of funds between Hong Kong and mainland China allows eligible funds to be distributed in each other’s markets.
China’s regulatory environment has presented challenges for the crypto industry. In 2021, the country banned Bitcoin mining and foreign crypto exchanges from serving mainland customers. However, despite these restrictions, Chinese courts have recognized Bitcoin as legal property in several jurisdictions, indicating a nuanced approach to cryptocurrency within the country.
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