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Chinese fund touts offshore crypto exposure in Alipay ad amid bitcoin boom
A Chinese fund manager has touted its fund's cryptocurrency exposure in an effort to draw investors amid a historic bitcoin boom, even as Beijing maintains a hostile stance towards the digital assets.
A fund advertisement that read "Cryptocurrencies soaring, start investing with 10 yuan" was spotted on Alipay, Chinese fintech giant Ant Group's mobile wallet app, crypto-focused outlet Wu Blockchain reported on Thursday.
The fund, a Qualified Domestic Institutional Investor (QDII) fund operated by Shanghai-based Hwabao WP Fund Management, boasted in the ad that it is heavily invested in Coinbase, a US cryptocurrency exchange listed in New York, and the ARK 21Shares Bitcoin ETF offered by US asset manager Ark Invest.
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QDII products, which allow qualified institutional investors to acquire overseas securities, have been one of the few avenues where individual mainland Chinese investors can access offshore equities.
A CoinFlip Bitcoin ATM is seen at a petrol station in Pasadena, California, December 9, 2024. Photo: AFP alt=A CoinFlip Bitcoin ATM is seen at a petrol station in Pasadena, California, December 9, 2024. Photo: AFP>
The top holdings of the QDII fund Hwabao marketed on Alipay include Ark Invest's ARK Innovation ETF and ARK Fintech innovation ETF, both of which count Coinbase among their top holdings.
"The fund is issued by Hwabao WP Fund and advertised through its account on the Ant Fortune page," said a spokesperson at Ant Fortune, Ant Group's wealth management platform.
The QDII fund is available for sale across multiple platforms, the Ant spokesperson added.
Hwabao WP Fund Management did not immediately respond to a request for comment.
Ant is the fintech affiliate of Alibaba Group Holding, which owns the South China Morning Post.
The fund's marketing move reflects mainland Chinese investors' persistent appetite for cryptocurrencies in spite of the government's crackdown on the sector, especially as bitcoin's price reaches new heights.
Bitcoin prices surged in the lead up to the US presidential election, after Republican nominee and now president-elect Donald Trump promised to boost the industry. The world's largest crypto token broke US$100,000 for the first time last week, after Trump selected crypto proponent Paul Atkins to head the US Securities and Exchange Commission.
While more experts in China have voiced concerns recently about the country's long-held conservative stance towards crypto, Beijing has given no indication that it would relax its scrutiny of the sector.
Local courts over the years have clarified that individual ownership of cryptocurrencies is protected as property, but Beijing still sees the digital asset as a threat to financial stability.
The country first banned initial coin offerings and ordered crypto exchanges to shut down in 2017. It ramped up its clampdown in 2021, when it banned bitcoin mining and declared crypto-related businesses illegal.
This article originally appeared in the South China Morning Post (SCMP) , the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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