The launch of six cryptocurrency spot ETFs in Hong Kong on April 30 marked a significant milestone—especially as the region beat the United States in launching an Ethereum spot ETF. Despite this achievement, market response has been cooler than expected. One of the primary reasons? Mainland Chinese investors are currently unable to participate.
While Hong Kong positions itself as a forward-thinking hub for digital asset innovation, access remains tightly restricted. For instance, popular brokerage platforms like Futu Securities only allow non-Chinese and non-U.S. residents to trade these new ETFs. The absence of mainland capital—historically a powerful driver in regional financial markets—has contributed to tepid trading volumes.
However, that could soon change.
Potential Pathway Through Stock Connect
There is growing optimism that mainland investors may gain access to Hong Kong’s crypto spot ETFs through the Stock Connect program—a trading link between mainland exchanges and the Hong Kong Stock Exchange. Currently, Stock Connect enables mainland investors to buy Hong Kong-listed equities via the Shanghai-Hong Kong (Shanghai Connect) and Shenzhen-Hong Kong (Shenzhen Connect) channels. If extended to crypto ETFs, it would open a regulated and scalable gateway for Chinese capital.
Recent developments suggest this expansion is under consideration.
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Harvest Global’s Vision: Integrating Crypto ETFs into Stock Connect
According to a report by South China Morning Post, Harvest Global Investments—the first firm to launch both Bitcoin and Ethereum spot ETFs in Hong Kong—is actively exploring the possibility of including its products in the Stock Connect program.
Han Tongli, CEO of Harvest Global, stated that if the next two years unfold smoothly, the company plans to formally apply for inclusion. This would allow mainland investors to purchase these ETFs using their existing brokerage accounts—without needing offshore access or special permissions.
“This is not just about expanding our investor base,” Han explained. “It’s about building trust in Hong Kong’s ability to manage digital assets responsibly.”
He acknowledged that skepticism remains high among global and regional investors due to lingering concerns over regulatory clarity and custody standards. That uncertainty has led many to adopt a wait-and-see approach, which in turn has dampened initial trading activity.
Yet Han remains confident in Hong Kong’s long-term potential.
Why Hong Kong Could Outpace the U.S. Market
Despite slow adoption at launch, Han believes Hong Kong could eventually host a crypto ETF market twice the size of the U.S. market. This bold projection hinges on several key factors:
- Strategic location: As a bridge between East and West, Hong Kong offers a neutral ground for global investors wary of geopolitical tensions.
- Regulatory maturity: With clear licensing frameworks and custodial rules already in place, Hong Kong provides a level of institutional confidence rare in emerging crypto markets.
- High retail engagement: Chinese investors have historically shown strong interest in digital assets, even during periods of regulatory crackdowns.
- Financial infrastructure: The city’s deep capital pools, advanced trading systems, and integration with mainland finance create fertile ground for innovation.
“If we can successfully bring crypto ETFs into Stock Connect,” Han said, “we won’t just be serving mainland demand—we’ll be setting a new benchmark for Asia.”
Challenges Ahead
Even with strong fundamentals, several hurdles remain:
- Regulatory caution: Beijing has maintained a strict stance on cryptocurrency trading, banning exchanges and initial coin offerings since 2017. While ETFs are structured differently—as regulated funds holding underlying assets—they still operate in a sensitive space.
- Market education: Many mainland investors lack familiarity with how ETFs work, especially those tied to volatile assets like Bitcoin and Ethereum.
- Competition from gray markets: Unregulated over-the-counter (OTC) platforms continue to attract users seeking indirect exposure to crypto, potentially limiting official product uptake.
Still, proponents argue that regulated ETFs offer critical advantages: transparency, audit trails, investor protection, and alignment with anti-money laundering (AML) standards—all of which align with China’s broader financial governance goals.
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FAQ: Your Questions About Hong Kong Crypto ETFs Answered
Q: Can mainland Chinese investors currently buy Hong Kong crypto ETFs?
A: No. Access is currently limited to non-Chinese and non-U.S. residents through most brokers. There is no direct channel via Stock Connect at this time.
Q: What is Stock Connect, and why does it matter?
A: Stock Connect is a program linking mainland stock exchanges with Hong Kong’s market. It allows mainland investors to trade eligible Hong Kong-listed securities. If crypto ETFs are included, it would unlock massive investor reach.
Q: Are Hong Kong crypto ETFs safe?
A: Yes, they operate under strict regulations set by the Securities and Futures Commission (SFC). They require licensed custodians, regular audits, and full disclosure—making them more secure than unregulated alternatives.
Q: How do crypto spot ETFs differ from futures-based ones?
A: Spot ETFs hold actual cryptocurrencies (like Bitcoin or Ethereum), while futures-based ETFs track price contracts. Spot ETFs are considered more transparent and directly tied to real asset value.
Q: Could Beijing approve crypto ETF access through Stock Connect?
A: While no official confirmation exists, gradual inclusion is possible if regulators observe stable performance and controlled risk over the next 1–2 years.
Q: What happens if Hong Kong’s crypto ETF market grows significantly?
A: Increased liquidity, lower fees, more product innovation (e.g., staking-enabled ETFs), and potentially greater influence over global crypto pricing trends.
The Road Forward
The success of Hong Kong’s crypto spot ETFs will depend not only on regulatory evolution but also on building trust—among investors, institutions, and policymakers alike. Early data shows cautious participation, but structural advantages suggest long-term growth is inevitable.
Harvest Global’s push for Stock Connect inclusion could be the catalyst needed to ignite broader adoption. If approved, it would mark a historic shift: bringing regulated digital asset investing into the mainstream Chinese financial system.
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As Hong Kong continues refining its digital asset ecosystem—from stablecoin frameworks to tokenized securities—the integration of crypto ETFs into cross-border investment channels seems less a question of if and more a matter of when. And when that moment arrives, the ripple effects across Asia and beyond could be transformative.
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- Hong Kong crypto ETF
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- Harvest Global Investments
- mainland Chinese investors
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