Thai SEC approves its first Bitcoin ETF with limited access to institutional investors

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The Securities and Exchange Commission (SEC) of Thailand has endorsed One Asset Management (ONEAM) as the first firm to launch a spot Bitcoin exchange-traded fund (ETF) in the country.

The fund, named ONE Bitcoin ETF Fund of Funds Unhedged and not for Retail Investors (ONE-BTCETFOF-UI), is scheduled for distribution between May 31 and June 6, with an investment risk level of eight.

According to a report from Bangkok Post, the ONE-BTCETFOF-UI is limited to wealthy and institutional investors and has a policy to invest in 11 leading global funds to ensure liquidity and safety. The fund stores coins using international standards and has been reviewed by regulatory agencies in the US and Hong Kong.

Pote Harinasuta, chief executive of ONEAM, stated that digital assets are an alternative asset class with low correlation to other financial assets, making them suitable for diversifying investment risks.

The approval of the fund follows the growing international recognition of Bitcoin ETFs, with the US SEC and Hong Kong’s Securities and Futures Commission allowing the creation of funds that invest directly in spot Bitcoin and Ethereum.

Despite the limited supply of Bitcoin at 21 million, demand is rising as it gains popularity, leading ONEAM to see high growth potential for the cryptocurrency. Over the past 11 years, Bitcoin has generated an average return of 124% per year, albeit with high average annual volatility of 83%.

ONEAM recommends investors allocate only 5% of their portfolio to Bitcoin to obtain a return of 8.90% per year, with a Sharpe ratio of 0.71 and a maximum drawdown of -22.4%. In comparison, a portfolio without Bitcoin generates a return of 5.80% per year, with a Sharpe ratio of 0.48 and a maximum drawdown of -20.4%.

“Although the supply of Bitcoin is limited at 21 million, demand is rising as it gains popularity. We see high growth potential for Bitcoin,” Pote notes.

Pote emphasized the importance of coin storage security in Bitcoin ETFs, as investing directly through various platforms carries risks such as data loss or stolen digital assets. By investing through ETFs, unitholders’ data or coins will be distributed through custodians, offering the same standard used by institutional investors, which involves storing coins offline for enhanced security.

Meanwhile, MFC Asset Management continues to await SEC approval for its own Bitcoin ETF, which is also restricted to wealthy and institutional investors.

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