China Bitcoin ETF

LUCKNOW ( — Could mainland Chinese investors soon gain access to Spot Bitcoin exchange-traded funds (ETFs) newly launched in Hong Kong? Comments from a prominent crypto investor have ignited rumors of potential policy shifts that could open this door.

The launch of Spot Bitcoin and Ether ETFs by Hong Kong exchanges on April 30th was a milestone for Asian crypto markets. While the first week of Spot ETF trading was lukewarm compared to U.S. Bitcoin ETFs so far, Hong Kong’s proximity to mainland China has raised the tantalizing possibility that these funds could become available to investors across the border.

Investor’s Comments Fuel the Bitcoin ETF Fire

Recent comments from Richard Byworth, managing partner at crypto investment firm SyzCapital, fuel the speculation. Byworth claimed he had heard the new Spot Bitcoin ETF in Hong Kong “could be added to Stock Connect.” This cross-border investment channel allows qualified investors in mainland China and Hong Kong to trade stocks listed on each other’s exchanges.

Source: X

If the Bitcoin ETFs were included under Stock Connect, it could theoretically open a pathway for mainland investors. They can gain exposure to Bitcoin through a regulated, institutional investment product. The same rumor applies to other cross-border schemes like the Qualified Domestic Institutional Investor program.

Fueling the speculation further were comments from Brian HoonJong Paik, co-founder of crypto firm SmashFi. Paik suggested Beijing may seek “an alternative asset to mitigate social unrest” stemming from China’s struggling real estate market, which accounts for 70% of household wealth.

Source: X

China’s Harsh Action…For Now?

The Bitcoin ETF rumors seem far-fetched given China’s harsh crackdown on crypto over the past few years. In 2021, the government banned Bitcoin mining and barred foreign crypto exchanges from serving domestic customers.

However, courts in some Chinese jurisdictions have deemed Bitcoin legal property. Additionally, China is still exploring the launch of its own central bank digital currency (CBDC), which indicates some level of openness to digital assets.

If China eventually allowed crypto investing through existing cross-border trading channels with Hong Kong, it could unlock a tidal wave of capital and mainstream adoption. Hong Kong’s new Bitcoin and Ether ETFs provide regulated vehicles for institutional investors to get exposure.

For now, the rumors of Chinese investors accessing Hong Kong’s Bitcoin ETFs remain just that – rumors. Beijing has not announced any official policy changes.

But the whispers reveal simmering interest in crypto investing from Chinese investors and businesses. As one of the first major jurisdictions to authorize Spot crypto ETFs, nearby Hong Kong could be a natural testing ground.

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