- Hong Kong’s Bitcoin ETFs are doing relatively well, considering the massive difference in population.
- Rumours suggest that these ETFs might soon be accessible to mainland Chinese investors through Stock Connect.
- If access is granted, it could significantly attract mainland capital, boosting the ETFs’ performance.
Hong Kong’s Spot Bitcoin ETFs have performed relatively well compared to their US counterparts, which have suffered from outflows in recent days. This is especially true when considering that the US has a population of over 330 million and Hong Kong only 7.3 million.
Initially, it was speculated that the Hong Kong ETFs could be accessed by mainland Chinese, but this proved to be false. Now, a new rumour has it that the ETFs may be accessed by mainlanders soon.
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Richard Byworth, Managing Partner at Swiss SyzCapital said that he had just been to Hong Kong and heard rumours about the ETFs.
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, Managing Partner at SyzCapitalShanghai-Hong Kong Stock Connect a Game Changer?
By ‘stock connect’ Byworth refers to the Shanghai-Hong Kong Stock Connect, which is a cross-border investment channel linking the Shanghai Stock Exchange with the Hong Kong Stock Exchange. This allows investors to trade shares in either market through their local brokers and clearing houses.
If true, this could indeed open the flood gates and bring in millions of mainland Chinese investors currently eager to deploy their capital amid local economic worries. Many investors are looking for alternate stores of value as the real estate sector collapses.
It remains to be seen if these investors will actually gain access to the Spot Bitcoin and Ethereum ETFs, or if rumours are just rumours.
Hong Kong ETFs With Huge Potential
While there are reports that the first trading day of these Hong Kong ETFs brought more in than six recent days combined of the US ETFs, that is of course selective.
First day of trading usually sees enormous inflows, and this was no different for the US-based Spot Bitcoin ETFs. These brought in a combined US$530.7 million (AU$807.2 million) inflows, as the below chart shows.
Since then, flows have significantly slowed down, and recently there have been more days of outflows than inflows.
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