Chinese mutual fund giants are eyeing Bitcoin ETFs (exchange-traded funds). This strategy, which seeks regulatory approval to take off in the second quarter, could redefine the way companies in the region view investments in cryptocurrencies.

After years of caution due to China’s restrictions on Bitcoin mining and cryptocurrencies in 2021, this change of direction signals renewed interest and untapped potential in digital assets. The subsidiaries of Jiashi Fund and Southern Fund are at the forefront of this foray, having already submitted their regulatory applications for the creation of Bitcoin ETFs.

Jiashi Fund is eager to launch a spot Bitcoin ETF, while Huaxia Fund subsidiary has joined forces with HashKey, a Bitcoin ETF custodian. These actions point to a deliberate strategy of utilizing Hong Kong’s operating units to delve deeper into the world of digital assets, taking advantage of the city-state’s favorable regulatory framework.

The industry expects spot Bitcoin ETFs to become available as early as the second quarter, with Hong Kong serving as a convenient platform for the creation and redemption of these products by Chinese companies. In a pioneering move, the Southern Fund subsidiary launched Asia’s first crypto ETFs in December 2022, cementing the Hong Kong stock market’s role as a prominent provider of Bitcoin and Ethereum futures ETFs.

This enthusiasm was catalyzed by the robust performance of Bitcoin, which has soared in value, persuading more mutual funds to explore the nascent field of spot ETFs. The Southern Fund Bitcoin Futures ETF, for example, saw its value increase by an impressive 134% in 2023.

Hong Kong emerges as a stronghold for the growth of the cryptoasset industry, with regulatory authorities dedicated to fostering responsible and stable development. The region is already home to more than 220 Web 3 companies, solidifying its status as a crucial hub for cryptocurrency innovation.

The rise in the price of Bitcoin, reaching new peaks, only reinforces the confidence of investment funds in the viability of spot ETFs, with the market capitalization of cryptocurrencies surpassing the US$1.3 trillion mark.


The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing or trading cryptocurrencies carries a risk of financial loss.


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