Hong Kong is set to introduce a new Bitcoin exchange-traded fund (ETF) that enables investors to bet against the cryptocurrency, even as it reaches near six-week highs. CSOP Asset Management’s CEO, Ding Chen, announced that the CSOP Bitcoin Futures Daily (-1x) Inverse Product will debut on Tuesday morning, marking the first crypto-linked inverse ETF in the Asia-Pacific region.
An inverse Bitcoin ETF is designed to generate returns opposite to Bitcoin’s performance. This means that when Bitcoin’s price declines, the value of the inverse ETF increases. This financial tool allows investors to profit from Bitcoin’s price drops without directly shorting the asset.
CSOP Targets $50M-$100M for New Inverse Bitcoin ETF
Chen expressed confidence in achieving a target of $50 million to $100 million in assets for the inverse Bitcoin ETF within a few years, with a management fee set at 1.99%. Some traders speculate that Trump-driven optimism might soon push Bitcoin’s price to $100,000, prompting investors to either manage their risk or adopt alternative strategies. CSOP anticipates demand for the inverse Bitcoin ETF primarily from investors in Japan, Korea, and Singapore.
Hong Kong’s Bitcoin ETFs to Compete with US Counterparts
Inverse Bitcoin ETFs have been gaining popularity in major financial centers like Canada and the US. These crypto-focused exchange-traded products have collectively attracted over $106 million in investments globally, according to Bloomberg. The leading product is the Short Bitcoin Strategy ETF by ProShares Advisors LLC, with $62.5 million in assets and a 1.33% management fee.
Hong Kong introduced its first cryptocurrency-focused ETFs in April, which are seen as potential competitors to popular US Bitcoin products. By the first quarter of 2024, the average daily turnover for the three virtual asset Futures ETFs listed in Hong Kong surged from $8.9 million last year to $51.3 million. Additionally, these ETFs attracted $529 million in net inflows during the same period.
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