Hong Kong to Launch 'Inverse Bitcoin ETF' for First Time in Asia

Asia's first inverse Bitcoin exchange-traded fund that allows investors to bet on a fall in the cryptocurrency, is set to debut in Hong Kong on Tuesday.

Hong Kong's CSOP Asset Management said it will launch the CSOP Bitcoin Futures Daily (-1x) Inverse Product on the city's stock exchange on Tuesday morning.

The ETF is expected to take advantage of rising demand to profit from the volatile trading of cryptocurrencies. After the first batch of spot crypto ETFs went public in Hong Kong in April, Bitcoin had a bumpy second quarter, losing more than 12 percent.

"The first futures-based inverse Bitcoin product listed in Hong Kong creates opportunities for investors to gain from downside movements in bitcoin," said Ding Chen, CEO of CSOP Asset Management in a statement.

Bitcoin has been the most erratic among major global assets in the last ten years, with volatility as high as 38.3 percent in 2023, surpassing crude oil and the Nasdaq 100, the company added.

Bitcoin rebounded strongly in the past few weeks on increased expectations that Republican presidential nominee Donald Trump would regain the White House. It was up slightly and traded at around $67,400 (roughly Rs. 56.3 lakh) on Monday following U.S. President Joe Biden's decision to quit the presidential race.

CSOP's inverse Bitcoin product aims to provide a return that closely matches the one-time inverse daily performance of the S&P Bitcoin Futures Index, the firm said.

CSOP launched Asia's first Bitcoin futures ETF in Hong Kong in 2022. The market value of the ETF grew to more than $100 million (roughly Rs. 836 crore) due to the global crypto price rally earlier this year, but had dropped to about $58 million (roughly Rs. 485.2 crore) as of Friday.

© Thomson Reuters 2024