The CEO of Harvest, the issuer of a spot Bitcoin exchange-traded fund (ETF) in Hong Kong, is exploring avenues to extend accessibility of its Bitcoin and Ether ETFs to mainland Chinese investors. Han Tongli is contemplating strategies to enable mainland Chinese investors to acquire Harvest's Bitcoin and Ether ETFs by offering these products through Hong Kong's ETF Connect framework, as reported by the South China Morning Post on May 9.

Launched in 2022 with approvals from the China Securities Regulatory Commission and the Securities and Futures Commission, ETF Connect aims to foster interaction and integration between Hong Kong and mainland China. It also seeks to offer diverse asset allocation options and enhance liquidity. Han Tongli expressed openness to the possibility of applying for inclusion of Harvest's ETFs in the ETF Connect program in the next two years, provided everything progresses smoothly.

The potential inclusion of Bitcoin and Ether ETFs in the ETF Connect program could serve as a significant bullish catalyst for cryptocurrency markets, given China's substantial investor base. However, it remains uncertain whether the Chinese government would embrace this opportunity, given its historically stringent stance on cryptocurrencies like Bitcoin.

Hong Kong's Bitcoin and Ether futures-based ETFs, launched in 2022, have not yet been integrated into Stock Connect, according to SCMP. The capability of Hong Kong to offer mainland Chinese investors access to a Bitcoin ETF had been a topic of interest even before the launch of Bitcoin and Ether ETFs in the region on April 30.

Despite the launch, industry analysts were cautious about anticipating significant market movements, citing the relatively smaller size of Hong Kong's ETF market compared to those in the United States and mainland China. Bloomberg data indicates that some Hong Kong-based subsidiaries of mainland Chinese firms have substantially more assets in the mainland Chinese market than in the local one. In fact, Hong Kong ETFs collectively represent only a fraction of the U.S. ETF market, amounting to approximately 0.6%.