TL; DR
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As the US slowly sorts things out in court (see previous article), there have been some interesting rumors about China letting its citizens invest in Hong Kong’s BTC ETFs.
To understand how they plan to do that, we first need to understand how a little thing called ‘Stock Connect’ works.
Stock Connect gives qualified investors from one market (in this case China) access to eligible stocks in another market (such as Hong Kong), as long as they buy a certain amount (but not too much).
Confused? We got you.
Currently, the Shenzhen-Hong Kong Stock Connect connects the Shenzhen Stock Exchange with the Hong Kong Stock Exchange, allowing certain investors to purchase certain stocks that only available on the Shenzhen Stock Exchange (and vice versa).
About a week ago, the Hong Kong Stock Exchange listed its first BTC ETFs.
And while there wasn’t a huge flood of money pouring in initially, these rumored stock connections would make their approval more important than we initially thought.
Not only is the market capitalization of the Shenzhen Stock Exchange larger than that of Hong Kong, but it could also open the floodgates for the other two major exchanges (Shaghai and Beijing) to trade BTC via ETFs.
Before we get too excited about this, it’s important to note that these are just rumors so far.
But it’s a turnaround since China banned Bitcoin mining and foreign crypto exchanges from offering their services to mainland customers in 2021.
Let’s see how it turns out.