Thailand has taken its first tentative steps into the world of Bitcoin by launching a unique exchange-traded fund (ETF) targeting high-net-worth individuals and institutions. This comes amid a global surge in interest in cryptocurrencies, but with Thai regulators taking a cautious approach, prioritizing security and access control for beginners.
Limited access for the privileged few
The Securities and Exchange Commission (SEC) has given its approval One Bitcoin ETF The Bangkok Post, a Thai-based daily newspaper, on Tuesday revealed a batch of unhedged funds, provided by One Asset Management (ONEAM). Unlike traditional ETFs that are accessible to the general public, this fund comes with a huge entry barrier.
Only accredited investors, a category that includes institutions and wealthy individuals, can participate. This restricted access reflects a common theme in Asia, where regulators are taking a measured approach to Bitcoin. While China has taken very strict measures, other countries such as South Korea and Japan have implemented stricter regulations on know your customer (KYC) and listing requirements on cryptocurrency exchanges.
Security first: Bitcoin is wrapped in a safety net
Oneme ETF Offers a twist on the typical investment model. Instead of directly holding top cryptocurrencies, the fund invests in a basket of 11 established global Bitcoin funds. This “fund of funds” structure aims to mitigate the risks associated with individual trading platforms, which have faced issues such as data breaches and stolen digital assets in the past.
BTCUSD trading at $68,940 on the 24-hour chart: TradingView.com
Furthermore, the ETF emphasizes secure storage practices, using international standards and custodians used by institutional investors. These secretaries store Bitcoin Offline, which greatly reduces vulnerability to online attacks.
Diversification play
For accredited investors, Bitcoin's appeal lies in its ability to diversify their portfolios. Currency price movements tend to have low correlation with traditional assets such as stocks and bonds. This means that including a small allocation of BTC can help reduce the overall volatility of the portfolio.
Despite its potential benefits,… second Acknowledges the risks inherent in investing in cryptocurrencies. Bitcoin's history is characterized by high volatility, with large price fluctuations. To manage this risk, ONEAM recommends a cautious approach, suggesting investors allocate only 5% of their investment portfolio to Bitcoin.
A calculated step forward for Thailand
The invasion of Thailand in Bitcoin ETFs It represents a calculated move by the organizers. It acknowledges the growing interest in cryptocurrencies but prioritizes protecting less sophisticated investors. Limited access and focus on secure storage reflect this cautious approach.
This contrasts with some other Asian markets, such as Hong Kong, which recently approved ETFs that invest directly in both Bitcoin and Ethereum, which could open doors to a wider range of investors.
Featured image from Pastel, chart from TradingView