- Hong Kong has debuted Asia’s first inverse bitcoin ETF, allowing investors to profit from declines in bitcoin prices.
- CSOP Asset Management launched the ETF to capitalise on the market’s demand for sophisticated crypto investment tools.
OUR TAKE
Hong Kong is set to make a big move in the cryptocurrency market with the launch of Asia’s first inverse bitcoin ETF, the CSOP Bitcoin Futures Daily (-1x) Inverse Product. This innovative financial product, which is set to launch on a Tuesday morning, will allow investors to bet against the price of bitcoin, thus providing a new tool for those anticipating a decline in cryptocurrency values. Speaking personally, I see this development as a bold move that reflects Hong Kong’s ambition to establish itself as a leading crypto hub, offering diverse investment opportunities in a highly volatile market. This move could potentially enhance the city’s status in the global financial landscape and attract a new wave of international investors.
—Heidi Luo, BTW reporter
What happened
CSOP Asset Management Limited is launching Asia’s first inverse bitcoin ETF, the CSOP Bitcoin Futures Daily (-1x) Inverse Product, on the Hong Kong Stock Exchange this Tuesday morning, according to the firm’s CEO Ding Chen. This innovative ETF allows investors to profit from declines in the price of Bitcoin, as a significant addition to the financial products available in the region.
The ETF’s debut is tailored to meet the growing demand for more sophisticated cryptocurrency investment strategies. It is designed to track the inverse of the daily performance of the S&P Bitcoin Futures Index, and will provide a tool for investors anticipating negative movements in the cryptocurrency market.
Investors in bitcoin have seen significant volatility this summer, with the price dropping below $54,000 in early July, then rebounding on positive speculation about Donald Trump’s possible return to office, pushing the value up to $67,234 by mid-afternoon in Hong Kong on Monday.
Also read: LunarCrush CEO: Crypto action not as busy as previous spikes
Also read: Why Hong Kong isn’t (yet) a top global crypto hub
Why it’s important
Hong Kong is actively seeking to position itself as a major cryptocurrency hub, competing with established centres such as Singapore and Dubai. As part of this effort, prominent asset managers such as Harvest Global Investments, the local unit of China Asset Management, along with a collaboration between HashKey Capital and Bosera Asset Management (International), launched bitcoin and ether ETFs in Hong Kong on 30 April.
Ahead of the launch of the Inverse product, Chen expressed confidence in an interview that they could accumulate $50 million to $100 million in assets for this ETF within a few years, with a management fee set at 1.99%. Chen also said that Trump-inspired optimism could drive the price of bitcoin higher.
Globally, inverse cryptocurrency ETFs have attracted around $106 million in assets, with the largest being ProShares Advisors‘ Short Bitcoin Strategy ETF, which holds $62.5 million and charges a 1.33% management fee.
As part of its strategy to develop into a crypto-friendly location, Hong Kong has licensed two crypto exchanges that can conduct limited retail trading. Unlike US funds, which operate on a cash redemption basis, Hong Kong’s bitcoin and ether ETFs allow for an in-kind subscription and redemption system.
