Crypto exchanges have opened a new gateway for international investors eager to tap into China's AI stock surge, bypassing traditional market restrictions. Instead of buying shares directly on Chinese exchanges, traders are turning to perpetual futures tied to Chinese tech firms, particularly chip manufacturers.
One standout example is CXMT, a Chinese memory-chip company scheduled to debut on Shanghai’s STAR Market. Ahead of the official public offering, crypto platforms like TradeXYZ and Gate.com have already listed perpetual contracts based on CXMT. These contracts allow traders to speculate on the stock's price without owning the underlying shares, creating a parallel market that circumvents strict Chinese regulations limiting foreign investment.
Data from CoinGlass shows approximately $19 million in daily trading volume for CXMT perpetual futures. The company aims to raise nearly $10 billion, which would mark the largest initial public offering in mainland China since 2010.
Why Crypto Offers a Loophole
China tightly controls foreign access to its stock markets through frameworks like the Qualified Foreign Institutional Investor program and Hong Kong’s Stock Connect, both of which have caps and limited eligible stocks. The STAR Market adds further hurdles by requiring retail investors to hold at least 500,000 yuan (around $74,000) in qualifying assets and a two-year trading history, restricting many local buyers from participating.
Perpetual futures traded on crypto exchanges sidestep such constraints because investors never actually hold the shares. Originally developed for cryptocurrencies like Bitcoin, these products now offer a way to engage with Chinese tech stocks without meeting traditional account rules.
