Key Points
- Hong Kong’s Bitcoin ETFs recorded the first outflows from ChinaAMC the other day.
- Trade agreements between China and Hong Kong could allow mainland investors to access HK crypto products.
Hong Kong’s Bitcoin ETFs recorded their first cumulative BTC outflows the other day, on May 6. These came from China Asset Management’s ETF after its debut on the Hong Kong Stock Exchange on April 30.
ChinaAMC’s Bitcoin ETF saw 75.36 BTC (about $4.8 million) leaving the product, while the other two ETFs saw zero inflows. This came after the three funds recorded an inflow of 3,910 BTC ($248 million) on their first trading day, SoSoValue data reveals.
The three ETFs, which are managed by ChinaAMC, Harvest, and Bosera/HashKey, were holding approximately 4,150 BTC ($263,5 million) as of Monday.
At the moment of writing this article, BTC is trading a little under $64k, down by 1% in the past 24 hours on CoinMarketCap.
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The latest reports coming from SoSoValue revealed that the total net inflows for Bitcoin ETFs in the US on May 6 were $217 million.
China mainland investors could access crypto ETFs
The launch of crypto ETFs in Hong Kong back on April 30 opened new doors to Asian traders.
The first week of trading ETFs was not such a blast compared to their US counterparts, Hong Kong’s proximity to China triggered discussions on whether the ETFs could become available to mainland China investors as well.
Richard Byworth, the managing partner at SyzCapital and Bitcoin investor, ignited rumors with some recent comments that suggested the fact that BTC ETFs listed in Hong Kong could become accessible to investors from mainland China as well.
China banned Bitcoin mining and foreign crypto exchanges from offering their services to mainland customers back in 2021.
However, despite the so-called blanket ban on crypto-related businesses and services, Chinese courts have deemed Bitcoin as a legal property in some jurisdictions.
On X, he shared a post saying that he just got back from Hong Kong and there “is talk” that the ETFs could be added to Stock Connect. According to him, the implications for this are huge, and this would mean that mainland investors could be able to buy the crypto products.
I just got back from Hong Kong. There is talk that the ETF could be added to stock connect. The implications for this are absolutely enormous (basically means mainland money can buy it)
— Richard Byworth ∞/21M (@RichardByworth) May 1, 2024
Stock Connect allows qualified investors from one market to access eligible shares in another market with a set quota. The Shenzen-Hong Kong Stock Connect, which is a cross-border investment route, connects the Shenzen Stock Exchange and the Hong Kong Stock Exchange.
Recently, it was also revealed that South Korea’s Democratic Party, a left-leaning political group, is reportedly planning to ask financial regulators to reassess the current prohibition on spot Bitcoin exchange-traded funds.
This move is seen as the party’s latest effort to make spot Bitcoin funds available for local investors.
