Another Country Will See its First Spot Bitcoin ETF: Report

According to the Bangkok Post, the Securities and Exchange Commission of Thailand (SEC) has granted approval to One Asset Management, a local company, to offer the first exchange-traded fund (ETF) in Thailand.

This ETF is available exclusively to wealthy and institutional investors and follows the policy of investing in 11 prominent global funds.

Diverse approach

The ONE Bitcoin ETF will be distributed to non-hedged funds and not to retail investors (ONE-BTCETFOF-UI) between May 31 and June 6. However, unlike traditional ETFs, this fund is available exclusively to wealthy and institutional investors.

“Digital assets are an alternative asset class with low correlation to traditional financial instruments.” He said Bot Harinasuta, CEO of ONEAM. He added: “It is suitable to help investors diversify investment risks.”

ONEAM's Bitcoin ETF takes a unique approach by investing in 11 leading global funds. This strategy ensures liquidity and safety for investors. The fund adheres to international standards for storing digital assets and has also undergone rigorous review by regulatory bodies in both the US and Hong Kong.

Meanwhile, as ONEAM celebrates its milestone, MFC Asset Management awaits SEC approval for its spot Bitcoin ETF. Similar to ONEAM's offering, MFC's ETF will also exclusively serve high-net-worth individuals and institutional clients.

Spot Bitcoin ETFs are gaining momentum globally, with the US Securities and Exchange Commission paving the way earlier this year by approving the first batch in the country. In April, Hong Kong's Securities and Futures Commission followed suit, allowing the creation of ETFs that include both Bitcoin and Ethereum. Recently, such a product saw the light in Australia.

Risk management strategies

Over the past 11 years, Bitcoin has generated an average annual return of 124%. However, this comes with high volatility, with the average annual volatility of BTC reaching 83%.

Bot Harinasuta emphasized that although the cryptocurrency is still highly volatile, combining it with other traditional assets can enhance expected returns while reducing risk-adjusted performance.

ONEAM acknowledges these risks and has advised investors to allocate only 5% of their portfolio to BTC through an ETF. Their analysis suggests that such a strategy could deliver an 8.90% annualized return with the potential to improve the overall risk-adjusted return.

“Investing in Bitcoin directly through various platforms comes with risks, with previous issues including data loss or digital assets being stolen via the online system,” Mr Bott said.

The ONE Bitcoin ETF aims to address these security concerns by offering investors custodian-level security practices, similar to those used by institutional investors. These custodians use offline storage of BTC, reducing the risk of online attacks.