After the successful launch of spot Bitcoin and Ethereum ETFs in Hong Kong, some in the crypto industry saw it as a statement directed towards China and the wider Asian market. However, Patrick Pan, CEO of OSL, which serves as the sub-custodian for the ChinaAMC and Harvest Global ETFs, sees it differently.
Pan believes it’s more accurate to view this development as a message coming “from” China rather than “to” mainland China. Given Hong Kong’s status as a Special Administrative Region under China’s control, decisions in the region often reflect the mainland’s influence.
According to Pan, the approval and launch of these ETFs speak volumes about Hong Kong’s role as a crucial gateway to mainland China. However, despite the significance of this development, mainland Chinese investors currently cannot invest in these funds directly. Hong Kong ETFs must be listed for at least six months before mainland investors can access them through the Shanghai Stock Exchange’s southbound stock connect program.
China has a complex relationship with cryptocurrencies, having banned them multiple times. Therefore, access to crypto ETFs in Hong Kong could provide mainland investors with a rare opportunity to enter the crypto market.
Despite regulatory challenges, Pan highlights Hong Kong’s resilience in developing a regulated digital asset sector. Compared to the lengthy approval process in the United States, where it took nearly a decade for spot Bitcoin ETFs to be approved, Hong Kong’s process was swift, taking only four months from application to trading.
OSL sees the $11 million trading volume on the debut day of Hong Kong ETFs as a promising start, indicating growing investor interest in digital asset products in the region. Pan sees this as a blueprint for wider adoption of digital asset products across Asia in the future.
