U.S. Crypto ETFs Dominate as Hong Kong Waits for Mainland Access

Hong Kong-listed crypto ETFs attracted just $14.1 million in inflows last week, a stark contrast to the $4.36 billion funneled into U.S. digital asset products, according to CoinShares. The data underscores the growing gap in investor appetite between the two regions, even as Hong Kong continues to strengthen its crypto infrastructure.

While total global inflows into crypto investment products reached $4.39 billion, the U.S. accounted for nearly all of it. Hong Kong’s subdued crypto ETF demand stands in contrast to the broader local ETF market, which saw $880 million in net inflows from July 14 to 18, as per Hong Kong Exchanges and Clearing. Equity-focused ETFs dominated, with digital asset funds comprising just 1.6% of the total.

In the U.S., the divergence is even more striking. Despite net outflows of $11.75 billion from equity ETFs and $5.55 billion in bond fund inflows, crypto funds bucked the trend, attracting capital at a record pace. The figures reflect how digital assets are increasingly being treated as a core portfolio component among U.S. investors, while in Hong Kong, crypto remains a peripheral asset class.

That could change if a path to the Chinese mainland opens.

At Consensus Hong Kong in February, Red Date Technology CEO Yifan He suggested that the Qualified Domestic Institutional Investor (QDII) program could provide mainland investors indirect access to Hong Kong’s spot crypto ETFs. The program already enables certain Chinese investors to buy U.S.-listed ETFs using RMB, and a similar model could be extended to crypto, He argued.

“Mainland investors wouldn’t hold crypto directly,” he explained. “Instead, they’d gain exposure via licensed intermediaries, similar to how they invest in overseas equities.”

Such a structure would not violate China’s current crypto ban and could be framed as a regulated investment product. While strict capital controls remain a hurdle, He noted shifting language from Chinese regulators.

“I see signals,” he said. “Regulators are starting to talk about bitcoin and show interest in understanding digital assets.”

Although not a sign of a crypto policy reversal, a sandboxed access model could meaningfully boost demand for Hong Kong’s crypto ETFs—an area where current uptake remains limited despite favorable regulation and solid infrastructure.

For now, U.S. crypto ETFs continue to dominate global flows. But should Beijing greenlight indirect exposure through Hong Kong, the regional balance could shift dramatically in the coming years.

Market Snapshot:

• Bitcoin (BTC): Trading above $117,000, staying within a narrow band.
• Ethereum (ETH): Rose to near $3,800 on Monday; up 13% year-to-date, signaling potential trend reversal.
• Gold: Climbed 1.2% to $3,391.90, buoyed by a weaker dollar and rate cut expectations.
• Nikkei 225: Gained 1.12% to 40,254.18 as Japanese markets reopened post-election.
• S&P 500: Closed mixed, but extended record highs alongside the Nasdaq.