According to the Bangkok Post, the Thai Securities and Exchange Commission (SEC) has given approval to One Asset Management, a local firm, to introduce Thailand’s first Bitcoin exchange-traded fund (ETF).
This ETF is exclusively available to wealthy and institutional investors and follows a policy of investing in 11 prominent global funds.
A Diversified Approach
The ONE Bitcoin ETF Fund of Funds Unhedged and not for Retail Investors (ONE-BTCETFOF-UI) will be distributed between May 31 and June 6. However, unlike traditional ETFs, this fund is exclusively available to wealthy and institutional investors.
“Digital assets are an alternative asset class with low correlation to traditional financial instruments,” said Pote Harinasuta, CEO of ONEAM. “They are suitable to help investors diversify investment risks,” he added.
ONEAM’s Bitcoin ETF takes a unique approach by investing in 11 leading global funds. This strategy ensures liquidity and safety for investors. The fund adheres to international standards for storing digital assets and has also undergone rigorous reviews by regulatory agencies in both the United States and Hong Kong.
Meanwhile, while ONEAM celebrates its achievement, MFC Asset Management awaits approval from the SEC for its own spot Bitcoin ETF. Similar to ONEAM’s offering, MFC’s ETF will also cater exclusively to high-net-worth individuals and institutional clients.
Spot Bitcoin ETFs are gaining traction globally, with the U.S. SEC paving the way earlier this year by approving the first batch in the country. In April, Hong Kong’s Securities and Futures Commission followed suit, allowing the establishment of ETFs that include both Bitcoin and Ethereum. More recently, such a product saw the light of day in Australia.
Risk Management Strategies
Over the past 11 years, bitcoin has delivered an average annual return of 124%. However, this comes with high volatility, with BTC’s average annual volatility sitting at 83%.
Pote Harinasuta emphasized that while the cryptocurrency remains highly volatile, integrating it with other traditional assets can enhance expected returns while also reducing risk-adjusted performance.
ONEAM acknowledges this risk and has advised investors to allocate only 5% of their portfolio to BTC through the ETF. Their analysis suggests such a strategy could achieve an annual return of 8.90% while potentially improving the overall portfolio’s risk-adjusted return.
“Investing in Bitcoin directly through various platforms contains risks, with past problems including data loss or stolen digital assets via the online system,” said Mr. Pote.
The ONE Bitcoin ETF aims to address this security concern by giving investors custodian-level security practices, similar to those used by institutional investors. These custodians use offline storage for BTC, minimizing the risk of online attacks.
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