Asia’s first inverse Bitcoin ETF launches in Hong Kong amid crypto market volatility
Photo by Erling Løken Andersen on Unsplash, with a modification by the author.
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The launch of Hong Kong's inverse Bitcoin ETF demonstrates the city's ambition to become a leading crypto financial hub. The new ETF is growing demand for sophisticated crypto investment tools amid political-driven market volatility.
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Hong Kong is set to launch Asia's first crypto-linked exchange-traded fund (ETF), allowing investors to compete with Bitcoin amid market volatility influenced by US political developments.
CSOP Asset Management will launch the CSOP Bitcoin Futures Daily (-1x) inverse product on Tuesday, marking significant growth in Hong Kong's crypto financial landscape. The product aims to provide investors with a way to hedge against or benefit from a possible decline in the value of Bitcoin.
This start comes as Bitcoin faces volatility after falling below $54,000 in early July before rebounding to $67,234 by Monday afternoon in Hong Kong. The recent rally is said to be optimism over the return of pro-crypto Donald Trump to office following US President Joe Biden's decision to abandon his re-election bid.
For Hong Kong, the inverse ETF represents another step in its ongoing efforts to position itself as a crypto-friendly hub, competing with cities like Singapore and Dubai. Although these products have received lukewarm reception so far, the city saw the launch of Bitcoin and Ether ETFs by asset managers Global Investments Ltd. and a partnership between Hashkey Capital and Bocera Asset Management on April 30.
CSOP CEO Ding Chen expressed confidence in the new product, saying that amassing $50 million to $100 million in assets from the contrarian Bitcoin ETF within a few years is “definitely achievable.” The firm charges a 1.99 percent management fee. Chen also said some traders speculated that Bitcoin could reach $100,000 “very soon” due to Trump's optimism, highlighting the importance of risk management options for investors.
Globally, reverse crypto exchange trading products have attracted close to $106 million. The largest of these funds, the Short Bitcoin Strategy ETF from ProShares, has amassed $62.5 million in assets with a management fee of 1.33%. Hong Kong's crypto ambitions extend beyond ETFs, with authorities licensing two crypto exchanges for limited retail trading and implementing an in-kind subscription and redemption system for ETF units.
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