The upcoming launch of spot Bitcoin and Ether exchange-traded funds (ETFs) in Hong Kong has garnered attention from investors worldwide. However, a significant limitation has emerged for mainland Chinese investors looking to access these ETFs.
Despite the approval of spot BTC and ETH ETFs in Hong Kong, mainland Chinese citizens won’t have the opportunity to invest in these products. This restriction stems from mainland China’s ban on crypto transactions, which has been in place for several years.
Chinese asset managers, including China Asset Management, Harvest Global Investments, and Bosera, have set up spot crypto ETFs through their Hong Kong subsidiaries. While these asset managers have close ties with mainland China, they are unable to provide Bitcoin or Ether exposure to investors in that jurisdiction.
This limitation aligns with a statement from the Chinese State Council issued in September 2021, which prohibits financial institutions from facilitating crypto-related transactions. As a result, even futures-based crypto ETFs listed in Hong Kong are inaccessible to Chinese investors due to brokerage rejections of such trades.
In summary, mainland Chinese investors currently face obstacles in accessing Bitcoin and Ether ETFs in Hong Kong due to regulatory restrictions. Despite the growing interest in crypto investments, these restrictions highlight the challenges associated with cross-border investment in the cryptocurrency market.
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