Hong Kong’s Bitcoin ETFs May Open To Mainland Chinese

SyzCapital managing partner Richard Byworth sparked rumors suggesting that Hong Kong-listed Bitcoin ETFs could soon be accessible to mainland Chinese investors. Byworth’s comments on X, formerly known as Twitter, highlight that discussions are ongoing about the possibility of integrating these ETFs into the Stock Connect system. This consolidation could pave the way for large-scale capital inflows into these digital asset funds from the mainland.

Byworth said“I just returned from Hong Kong. There is talk that ETFs may be added to Stock Connect. The implications of this are huge (basically meaning you can buy them with mainland money).” The statement was issued following a dialogue initiated by Samson Mo, who commented on the impressive initial performance of the China AMC Bitcoin ETF, which raised $121 million on its first trading day.

Will Hong Kong Bitcoin ETF be launched for mainland China?

“I think everyone should be a little more bullish,” Mo said, reflecting his optimistic outlook for the future of Bitcoin ETFs in Hong Kong. Brian HoonJong Paik, co-founder and COO of SmashFi, added depth to the discussion. expressed His views on the financial and socio-economic motivations that could drive mainland China’s interest in Hong Kong Bitcoin ETFs.

He emphasized that China’s vast wealth is locked up in real estate, with approximately 100 million vacant houses, and pointed to the dire need for alternative investment opportunities to stabilize the socio-economic situation. “It’s only a matter of time. The Chinese Communist Party needs alternative means to alleviate social unrest,” Pike said.

Mr. Bai also refuted the widespread misconception that mainland Chinese investors are currently restricted from investing in ETFs available on the Hong Kong Stock Exchange. He explained that several existing financial arrangements have already facilitated strong inflows of mainland capital into the Hong Kong market.

Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect are prominent examples, allowing investors to trade stocks across borders, albeit regulated by daily trading quotas. .

Additionally, the Qualified Domestic Institutional Investor (QDII) regime allows Chinese institutional investors to participate in overseas markets, including Hong Kong. In addition, Chinese residents have the option of investing through brokerage firms legally operating in both countries’ territories, helping them navigate the complex regulatory environment governing foreign investments.

Another important framework, the Mutual Recognition of Funds (MRF) between Hong Kong and Mainland China, facilitates the distribution of eligible investment funds into each other’s markets through a streamlined approval process. Excluding Bitcoin ETFs from these arrangements is likely to cause significant dissatisfaction and could disrupt the investment climate in both regions, Pike said.

“These mechanisms make the Hong Kong stock market one of the most accessible overseas markets for Chinese investors and promote financial integration between the mainland and Hong Kong. Excluding only Bitcoin ETFs, Chinese and Hong Kong institutions “This is likely to have a significant impact on both investors and retail investors,” he said.

Notably, Singapore-based Matrixport already predicted in mid-April that the approval of a Hong Kong-listed Bitcoin Spot ETF and its subsequent inclusion in Southbound Stock Connect could raise $25 billion in capital. was. The program will facilitate up to RMB 500 billion ($70 billion) in transactions annually.

At the time of writing, BTC was trading at $64,172.

BTC price regains $64,000, 4-hour chart | Source: BTCUSD on TradingView.com

Featured images created with DALL・E, charts on TradingView.com

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