- The Securities and Exchange Commission (SEC) of Thailand has given the green light to One Asset Management (ONEAM) to roll out the nation’s inaugural spot Bitcoin exchange-traded fund (ETF), marking a significant milestone in Thailand’s financial industry.
- Exclusive access to this ETF will be granted to affluent and institutional investors, underscoring a prudent regulatory approach towards retail participants.
- Pote Harinasuta, CEO of ONEAM, remarked, “Digital assets are an alternative asset class with low correlation to other financial instruments, making them ideal for risk diversification.”
ONEAM’s new Bitcoin ETF approval marks a pioneering step for Thailand, embracing regulated digital asset investment strategies for wealthy and institutional investors.
Thailand Embraces the Wave of Spot Bitcoin ETF Approvals
The newly sanctioned fund will be available between May 31 and June 6, carrying a high-risk investment rating of eight. The ONE Bitcoin ETF’s asset allocation will include 11 premier global BTC funds to maintain liquidity and security.
International Influence and Growing Acceptance of Bitcoin ETFs
Having undergone scrutiny by US and Hong Kong regulators, these BTC funds set a precedent that has likely swayed Thailand’s SEC. Harinasuta noted, “Although the Bitcoin supply is capped at 21 million, its increasing popularity signals considerable growth prospects.” This reflects a global shift towards recognizing Bitcoin ETFs as viable investment avenues.
Potential and Performance Metrics of Bitcoin Investment
Bitcoin boasts a market capitalization of $1.4 trillion and has shown an average annual return of 124% over the past 11 years, despite its annual volatility rate of 83%. Harinasuta indicated, “While Bitcoin investment offers significant returns, investors must be prepared for high volatility.”
For portfolio diversification, ONEAM recommends that investors allocate up to 5% to BTC. This strategy promises an average return of 8.90% per annum, with a Sharpe ratio of 0.71, and a maximum drawdown of -22.4%. Conversely, a portfolio without BTC would yield an average return of 5.80% per year, a Sharpe ratio of 0.48, and a maximum drawdown of -20.4%.
Security Measures and Institutional Standards
Harinasuta emphasized the critical role of coin storage security, noting historical issues with data loss and theft in direct BTC investments. “Investing in Bitcoin via various platforms involves risks, including data loss or digital asset theft,” he explained. The ETF mitigates these risks by using custodians adhering to institutional standards, ensuring offline coin storage for enhanced security.
The Thai SEC’s endorsement responds to soaring demand from local institutions for regulated BTC investment options. This move mirrors actions by regulators in the US, Hong Kong, Australia, and the UK, who have embraced regulated Bitcoin investment products earlier this year.
Market Competition and Future Prospects
As ONEAM takes the lead in offering Thailand’s first spot ETF, MFC Asset Management is still awaiting regulatory clearance for its own Bitcoin ETF. The competitive landscape in Thailand’s budding spot Bitcoin ETF market will be under close observation as more companies aim to capitalize on growing institutional interest in digital assets.
Conclusion
The SEC’s approval of ONEAM’s spot Bitcoin ETF represents a significant advancement for Thailand’s financial sector, providing regulated Bitcoin investment options to wealthy and institutional investors. As the country aligns with global trends, the burgeoning market is expected to attract increased institutional participation, setting the stage for future developments in digital asset investments.
