TLDR
- Thailand has approved the first Bitcoin ETF (Exchange Traded Fund) in the country, called the “ONE Bitcoin ETF Fund of Funds Unhedged and not for Retail Investors (ONE-BTCETFOF-UI).”
- Access to this Bitcoin ETF is limited to ultra-high-net-worth individuals and institutional investors only, not retail investors.
- The Bitcoin ETF has been given a high-risk level of 8 by the Thai Securities and Exchange Commission (SEC).
- The fund will invest in 11 global Bitcoin funds to ensure liquidity, safety, and secure storage of the cryptocurrency.
- The Thai Bitcoin ETF has been reviewed and approved by regulatory agencies in the United States and Hong Kong.
Thailand has joined the growing list of countries offering Bitcoin Exchange Traded Funds (ETFs) with the approval of the “ONE Bitcoin ETF Fund of Funds Unhedged and not for Retail Investors (ONE-BTCETFOF-UI).”
The Thai Securities and Exchange Commission (SEC) has given the green light to One Asset Management (ONEAM) to launch this first-of-its-kind Bitcoin ETF in the country.
However, unlike traditional ETFs, access to this Bitcoin ETF will be strictly limited to ultra-high-net-worth individuals and institutional investors.
Small retail investors will not be able to invest in this fund. The Thai SEC has classified the Bitcoin ETF as a high-risk investment, assigning it a risk level of 8 on their scale.
The decision to restrict the Bitcoin ETF to wealthy and institutional investors is likely due to the high volatility and risk associated with cryptocurrencies like Bitcoin.
The SEC aims to protect small investors from the potential losses that could arise from investing in such a volatile asset class.
To ensure liquidity and security, the ONE Bitcoin ETF Fund of Funds Unhedged and not for Retail Investors will invest in 11 leading global Bitcoin funds.
This diversification strategy is designed to provide ample liquidity for investors to enter and exit the fund without disrupting the market.
Additionally, the fund will store the cryptocurrency using internationally accepted standards for secure storage, further safeguarding investors’ assets.
Interestingly, the Thai Bitcoin ETF has undergone scrutiny from regulatory agencies in the United States and Hong Kong before receiving approval.
This added layer of review from two major financial hubs suggests that the Thai SEC has taken extra precautions to ensure the fund meets global standards and best practices.
ONEAM’s CEO, Pote Harinasuta, believes that digital assets like Bitcoin offer a compelling investment opportunity due to their low correlation with traditional financial assets.
This low correlation can help investors diversify their portfolios and mitigate overall investment risk.
“Digital assets are an alternative asset that has a low correlation with other financial assets. They are suitable to help investors diversify investment risks,” Harinasuta stated.
Despite the limited supply of 21 million Bitcoins, Harinasuta sees high growth potential for the cryptocurrency as demand continues to rise with increasing adoption and popularity.
While acknowledging the potential for high returns from investing in Bitcoin, Harinasuta also cautioned about the asset’s volatility.
ONEAM recommends allocating only 5% of an investment portfolio to Bitcoin to achieve an expected annual return of 8.9%, with a maximum drawdown of -22.4%.
