Chinese Mainland Equity Funds Pursue Spot Bitcoin ETFs Through Hong Kong Subsidiaries

Mainland Chinese fund companies are utilizing their Hong Kong subsidiaries to explore the realm of spot Bitcoin exchange-traded funds (ETFs), reflecting a notable interest in this emerging investment avenue.

According to a report from China's state-owned newspaper, Securities Times, multiple Chinese mainland-based equity funds have reportedly submitted applications via their Hong Kong subsidiaries to launch spot Bitcoin ETFs. While the full roster of Chinese companies eyeing spot Bitcoin ETFs remains undisclosed, it is confirmed that Harvest Fund Management's Hong Kong branch is awaiting approval from the Securities & Futures Commission (SFC) of Hong Kong since January. Additionally, other Chinese public equity funds are said to be assessing the feasibility and potential prospects of spot Bitcoin ETF products.

Furthermore, China Asset Management's Hong Kong division, one of the largest asset management companies in China, has purportedly entered into a cooperation agreement with HashKey, a licensed crypto exchange in Hong Kong. The collaboration aims to jointly promote and advance initiatives related to Web 3.0 in the asset management sector within Hong Kong. Although a specific timeline for the introduction of spot Bitcoin ETFs in Asia remains unannounced, industry experts suggest that relevant applications could materialize as early as the current quarter.

The drive towards spot crypto ETFs gained momentum when, in late 2023, the SFC and the Hong Kong Monetary Authority jointly issued a circular recognizing the growing interest in launching such ETFs. While the SFC has granted approval for licensed crypto providers to offer crypto futures ETFs in the region, regulatory clearance for spot ETFs is still pending.