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Hong Kong’s Spot Crypto ETF Launch: No Gateway for Mainland China Investors

The impending debut of spot Bitcoin and Ether exchange-traded funds (ETFs) in Hong Kong won’t extend market access to investors in mainland China, as per insights from Bloomberg data analyst Jack Wang.

After Hong Kong gave the nod to spot BTC and ETH ETFs, three Chinese asset management firms—China Asset Management, Harvest Global Investments, and Bosera—set the stage for the spot crypto ETFs via their Hong Kong subsidiaries by April 30.

Despite the close affiliations of ETF issuers with mainland China, they won’t be facilitating Bitcoin or Ether exposure for investors in that jurisdiction.

“Mainland Chinese citizens will not be able to participate in this,” Wang affirmed during a Bloomberg webinar on April 24, referencing a directive from the Chinese State Council in September 2021 that prohibits financial institutions from engaging in crypto-related transactions.

“Even for the futures-based crypto ETF listed in Hong Kong—I actually tried to set a trade—the brokers will just directly reject the trade,” Wang noted, emphasizing the immediate disconnect of Chinese investors from this product.

READ MORE: Hong Kong Approves First Wave of Spot Bitcoin and Ether ETFs for Trading

Wang further asserted that the launch of spot Bitcoin and Ether ETFs in Hong Kong won’t catalyze any positive changes in mainland China’s regulatory landscape nor open up the crypto market to Chinese investors.

“I would say it’s 100% not going to happen at least,” the analyst remarked.

Thomas Zhu, head of digital assets at China Asset Management, highlighted the potential eligibility of mainland Chinese investors to acquire crypto ETFs in Hong Kong contingent upon forthcoming regulatory adjustments.

Amidst buoyant anticipation surrounding the impending spot crypto ETF launch in Hong Kong, Bloomberg analyst James Seyffart underscored the dominance of Bitcoin ETFs in the United States, surpassing the total assets of all ETFs in Hong Kong.

“The U.S. ETF market is almost $9 trillion in assets—that’s trillion with a ‘T’. The entire Hong Kong ETF market is around $50 billion.

Mainland China ETFs are around $325 billion. We’re talking literal orders of magnitude differences in size and impact,” Seyffart elaborated in an X post on April 12.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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