Harvest CEO Plans to Bridge Crypto ETFs to Mainland China via Stock Connect

Harvest CEO Plans to Bridge Crypto ETFs to Mainland China via Stock Connect

by May 13, 2024

During the recent Bitcoin Asia conference at the Kai Tak Cruise Terminal, Han Tongli, CEO and Chief Investment Officer of Harvest Global Investments, discussed potential future developments for cryptocurrency investments in China.

Han TongliCrypto ETFs China

Han Tongli

Harvest CEO Han Tongli mentioned that the company is open to applying for its ETFs, which directly invest in crypto tokens, to be included in the connect program linking exchanges in mainland China and Hong Kong, provided that “everything goes smooth and well” over the next two years.

This inclusion would allow mainland Chinese investors direct access to these digital assets, significantly diversifying their investment opportunities.

ETF Connect, launched in May 2022, facilitates mainland investors’ access to select ETFs listed in Hong Kong and is part of the larger Stock Connect scheme that first connected the Hong Kong and Shanghai stock exchanges in 2014.

Including Harvest’s crypto ETFs could serve as a major confidence boost for the market despite Beijing’s historically cautious stance on cryptocurrencies. Most commercial crypto activities remain banned on the mainland, and the legalities of trading and ownership continue to be debated.

Harvest’s move comes at a critical time when Hong Kong is positioning itself as a crypto hub. The city’s recently launched spot Bitcoin and Ethereum ETFs—the first in Asia—have been lauded as a significant step in this direction.

These products offer unique advantages such as in-kind subscriptions, allowing purchases directly with Bitcoin and Ethereum, and temporary management fee waivers to attract investment.

Despite these innovations, the initial trading volumes for these ETFs have been modest compared to the US market, partly due to ongoing scepticism about Hong Kong’s regulatory stance towards virtual assets.

Han Tongli acknowledged these challenges during a panel discussion at the conference, noting that Hong Kong’s status as a Special Administrative Region adds layers of complexity that have influenced market dynamics.

However, he remains optimistic about the local market’s growth potential, suggesting that Hong Kong’s crypto ETFs could eventually surpass those in the US in size.

Johnny Ng

Legislative Council member Johnny Ng, who opened the Bitcoin Asia conference, echoed this sentiment, emphasising that these new financial products mark an important milestone in Hong Kong’s ETF market development.

Harvest’s crypto ETFs achieved the second largest first-day trading volume among the three companies that introduced them, with China Asset Management Company (ChinaAMC) recording the largest.

As it stands, Harvest Global Investments is focused on establishing its spot crypto ETFs as the largest by trading volume in Hong Kong by the end of this year. The company is also preparing to issue collateralised financial products based on the ETFs, further expanding its innovative product suite.

Featured image credit: Edited from Freepik