Mainland China Investors Blocked from Accessing Hong Kong Bitcoin and Ether ETFs Due to Regulatory Hurdles

Following the approval of spot Bitcoin and Ether ETFs in Hong Kong, mainland Chinese citizens will not be able to purchase these investment vehicles due to China's ban on cryptocurrency transactions. Despite the involvement of Chinese asset managers like China Asset Management, Harvest Global Investments, and Bosera in setting up these ETFs through their Hong Kong subsidiaries, they cannot provide exposure to Bitcoin or Ether for investors in mainland China. This restriction is in line with a statement from the Chinese State Council issued in September 2021, prohibiting financial institutions from facilitating crypto-related transactions. Bloomberg data analyst Jack Wang highlighted this during a webinar, noting that even futures-based crypto ETFs listed in Hong Kong are inaccessible to Chinese investors due to trade rejections by brokers. Thomas Zhu, head of digital assets at China Asset Management, emphasised that mainland Chinese investors' ability to acquire crypto ETFs in Hong Kong hinges on forthcoming regulatory changes.Despite optimism surrounding the launch of spot crypto ETFs in Hong Kong, Bloomberg analyst James Seyffart pointed out the significant size difference between the U.S. ETF market (almost $9 trillion) and that of Hong Kong (around $50 billion), emphasising the limited impact on mainland China's much larger ETF market (around $325 billion).