Bitcoin ETF Ads Appear on China’s Alipay Platform, Sparking Interest in Crypto Investments

December 12, 2024 — Alipay, China’s largest payment platform with over 1 billion users, has sparked a wave of interest in cryptocurrency by featuring Bitcoin-related advertisements. These ads, which appeared on the homepages of Alipay users in mainland China, promoted investments in a fund that indirectly exposes investors to a US spot Bitcoin ETF and Coinbase.

Crypto Ads on Alipay: An Unexpected Development

On December 11, 2024, local news outlet Sina Finance reported that Alipay users in mainland China were shown ads encouraging them to invest in Bitcoin-linked products. The advertisements read: “Global investment, cryptocurrency soaring, 10 yuan minimum investment, get on board now.” The ads led users to a financial product known as Huabao Overseas Technology C (QDII-FOF-LOF), which has indirect exposure to Coinbase stock and the ARK 21Shares Bitcoin ETF.

The product being promoted offers a maximum purchase limit of 1,000 yuan (around $137) per day, with a minimum investment of 10 yuan (about $1.40). The ad's presence on Alipay is significant, given the platform’s previous history of prohibiting cryptocurrency-related transactions.

Crypto Investments via QDII Funds

Prominent Chinese market observer Colin Wu highlighted that this particular product does not offer direct exposure to Bitcoin, but rather provides indirect exposure through investments in Wood Sister’s fund, which in turn holds shares of Coinbase and the ARK Bitcoin ETF. Wu noted that several similar QDII (Qualified Domestic Institutional Investor) funds were also advertising crypto investments on Alipay, reflecting a growing, albeit indirect, interest in digital assets in China.

These developments come amid speculation and market buzz surrounding China’s stance on cryptocurrency. Despite the Chinese government's strong anti-crypto stance in recent years, some industry experts suggest that certain loopholes may be facilitating this crypto activity.

Alipay's Crypto Past and Regulatory Context

Alipay’s current foray into crypto-related ads is particularly notable given the platform’s history. In 2019, Alipay officially banned Bitcoin transactions, in line with the Chinese government’s crackdown on cryptocurrency trading. In fact, the Chinese government has maintained a hardline stance against cryptocurrencies, banning crypto exchanges in 2017 and enforcing a broad ban on crypto transactions in 2021.

While the Chinese government has repeatedly declared that crypto assets are legal properties, it continues to impose strict regulations that have curtailed much of the cryptocurrency activity within mainland China. However, the latest ads on Alipay may suggest that there is some softening around the edges, possibly due to third-party advertisers finding ways to circumvent some of the restrictions.

Industry Reactions and Speculation

According to Yifan He, CEO of Red Date Technology, the parent company of Alipay’s operator, Ant Financial Services Group, offering Bitcoin ETF-related services would not be surprising. He noted that Ant Financial already offers some US ETF trading services, meaning that facilitating Bitcoin ETFs could align with the company's existing offerings. However, He also suggested that these ads might not be a direct initiative from Ant Financial, but rather the result of third-party advertisers exploiting a regulatory loophole.

He further emphasized that, as long as yuan remains confined within the country and illegal capital outflows are prevented, regulators might not see these crypto ads as a major issue. Despite this, He believes these advertisements will likely disappear soon, as they do not represent an official offering from Alipay or Ant Financial.

The Road Ahead for Bitcoin in China

This sudden appearance of Bitcoin-related ads on a platform like Alipay raises questions about the future of cryptocurrency in China. While the country has maintained a strong stance against direct Bitcoin transactions, recent rumors about potential policy shifts have kept the community on edge. For example, Mike Novogratz, CEO of Galaxy Digital, speculated in 2024 that China might be considering a Bitcoin “unban” as part of its evolving regulatory approach.

Despite these speculations, mainstream access to cryptocurrency remains a sensitive issue in China. The use of platforms like Alipay for crypto ads, even indirectly, signals growing demand for digital assets, but the future remains uncertain as the country’s regulators continue to enforce stringent controls on crypto activity.

In the meantime, industry figures remain cautious. For example, Jack Wang, an analyst at Bloomberg, pointed out that Hong Kong’s crypto exchange-traded funds (ETFs) would not be available to mainland Chinese investors, underscoring the ongoing regulatory divide.

Conclusion

Alipay’s recent crypto ads offer a glimpse into the growing, albeit indirect, interest in cryptocurrencies within mainland China. With the Chinese government maintaining tight controls over the sector, these ads represent a notable, though likely temporary, deviation from the strict regulatory environment. Whether this marks the beginning of a wider opening to crypto in China, or if the ads will be swiftly removed, remains to be seen. For now, the crypto community will be watching closely as China navigates its regulatory path forward.