Harvest Global intends to use the ETF Connect program to bring its bitcoin ETFs to the Chinese mainland.
With its innovative cryptocurrency ETFs, Harvest Global Investments is planning a bold expansion into mainland China, heralding a new age of investing possibilities between Hong Kong and the Chinese mainland.
Besides being one of the three first issuers of spot cryptocurrency ETFs in Hong Kong, Harvest Global Investments is already planning to open up their products to investors on the mainland who want to buy Bitcoin and Ethereum separately. Their possible incorporation into the ETF Connect program is a manifestation of this goal.
As part of the larger Stock Connect programme, which started in 2014 and first connected the Hong Kong and Shanghai stock exchanges, this initiative, which will be launched in May 2022, enables mainland investors to interact with certain ETFs listed in Hong Kong.
During the Bitcoin Asia conference, Han Tongli, CEO and CIO of Harvest Global, expressed the company’s willingness to apply for its exchange-traded funds (ETFs) to be included in this link programme. These funds invest directly in crypto tokens.
However, there is a catch: the next two years are crucial. Their crypto ETFs’ incorporation into this plan has the potential to attract a large number of new investors and boost market trust.
Although there is great potential for revolutionary growth, obstacles abound because of the Beijing government’s well-documented aversion to financial innovation and cryptocurrencies. While selling and owning cryptocurrencies by individuals continues to be a contentious topic, most commercial bitcoin operations are presently outright forbidden in mainland China.
The creation of the first spot for Bitcoin and Ether ETFs in Asia was, nonetheless, a recent milestone in Hong Kong’s crypto sector. Trading volumes were tepid during the introduction, despite its pioneering position; this was in sharp contrast to the thriving U.S. ETF markets.
But the novel approach of these products was the main selling point. For example, fund managers would temporarily waive management fees in order to entice investors, and in-kind subscriptions would enable them to buy ETFs directly with Bitcoin and Ether.
The mixed feelings and caution with which many investors view Hong Kong’s ambitions to become a regional crypto powerhouse are borne out by the diverse reactions to these ETFs.
Han voiced his disappointment with the slow start during a panel at the Bitcoin Asia conference, but he is optimistic about the local market’s potential growth. He believes that the Hong Kong market, which is more neutral and has a broader appeal in Asia, could eventually double the size of its American counterparts.
Han predicts that by the end of the year, the local crypto ETFs will have the highest trading volume in Hong Kong, thanks to the city’s efforts to build a comprehensive virtual asset ecosystem. In addition to these ETFs, Harvest is gearing up to provide collateralized financial instruments, which will further diversify its portfolio.
Over the course of the two days held at the Kai Tak Cruise Terminal, the Bitcoin Asia conference gave these ETFs a lot of attention. In his opening comments, Johnny Ng, a member of the Legislative Council, expressed his enthusiasm for the ETFs and hailed them as a significant step forward for Hong Kong’s financial sector.
Harvest Global and the wider ETF market in Hong Kong face regulatory hurdles despite the second-largest first-day trading volume in these ETFs, with China Asset Management Company at the front of the group.
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