Hong Kong Launches Asia’s First Bitcoin Inverse ETF

Hong Kong pioneers a new investment vehicle allowing investors to profit from Bitcoin’s decline, marking a significant first in Asia.

On July 23, Hong Kong will break new ground by introducing Asia’s first Bitcoin futures inverse product, the CSOP Bitcoin Futures Daily (-1x) Inverse Product (7376.HK). This innovative exchange-traded fund (ETF) by China Southern Asset Management Co., Ltd (CSOP) will enable investors to benefit from declines in Bitcoin’s price.

Asia’s First Bitcoin Futures Inverse ETF

The CSOP Bitcoin Futures Daily (-1x) Inverse Product, set to debut on the Hong Kong Stock Exchange (HKEX), will be listed at an initial price of around 7.8 Hong Kong dollars (HKD) per unit. It aims to provide investment results that closely mirror the inverse daily performance of the S&P Bitcoin Futures Index. This is achieved through a futures-based replication strategy involving direct investments in spot-month Bitcoin futures traded on the Chicago Mercantile Exchange (CME).

Ding Chen, CEO of CSOP Asset Management, expressed her enthusiasm: “As an ETF issuer esteemed by investors in the APAC region, CSOP has always aimed to offer comprehensive and diversified investment products. We are currently the leading provider of Leveraged and Inverse products in Hong Kong, with a market share of 99%.” She added that this product provides a unique opportunity for investors to profit from Bitcoin’s potential decline.

CSOP’s Expansion in the Asia-Pacific Region

Source: csopasset.com

This new product marks another milestone in CSOP’s strategic expansion within the Asia-Pacific region. It follows the successful launch of the CSOP Bitcoin Futures ETF (3066.HK) in December 2022, one of the first crypto-linked ETFs in the region. Since late 2022, HKEX has been trading spot crypto ETFs, starting with CSOP’s Bitcoin Futures ETF and Ether Futures ETF, which track Bitcoin and Ether futures cash-settled contracts on the CME.

In January 2023, Samsung Asset Management Hong Kong also introduced a Bitcoin futures ETF. As of April 29, these ETFs have collectively amassed approximately 1.3 billion HKD, or around $170 million, in assets under management.

Growing Interest in Inverse Crypto Products

Globally, inverse crypto exchange-traded products have attracted significant interest, with approximately $106 million in investments to date. The largest of these is the Short Bitcoin Strategy ETF from ProShares Advisors LLC, which has accumulated $62.5 million in assets and charges a 1.33% management fee. In Hong Kong, the total assets held by the six Bitcoin and Ether ETFs now stand at $362 million. Meanwhile, the spot Bitcoin ETFs launched in the U.S. in January have collectively accumulated $60.7 billion in assets.

Conclusion

The launch of the CSOP Bitcoin Futures Daily (-1x) Inverse Product highlights Hong Kong’s continued innovation in the cryptocurrency investment space. As the first of its kind in Asia, this ETF provides investors with a new way to engage with the volatile cryptocurrency market, offering potential profits from Bitcoin’s downturns. This development reflects broader trends in the global market, where interest in inverse and crypto-linked products continues to grow.

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