July 24, 2024
By Anjali Kochhar
Hong Kong is planning to launch Asia’s first inverse Bitcoin exchange-traded fund (ETF), allowing investors to profit from the cryptocurrency’s decline. The CSOP Bitcoin Futures Daily (-1x) Inverse Product, developed by CSOP Asset Management, went live on the city’s stock exchange on Tuesday morning.
This innovative ETF is designed to capitalize on the rising demand to profit from the volatile nature of cryptocurrency trading. Following the introduction of the first batch of spot crypto ETFs in Hong Kong in April, Bitcoin experienced a turbulent second quarter, dropping more than 12%.
“The first futures-based inverse Bitcoin product listed in Hong Kong creates opportunities for investors to gain from downside movements in Bitcoin,” stated Ding Chen, CEO of CSOP Asset Management.
Over the past decade, Bitcoin has been one of the most erratic major global assets. In 2023, its volatility reached 38.3%, surpassing both crude oil and the Nasdaq 100, according to CSOP. Despite recent turbulence, Bitcoin rebounded strongly in the past few weeks, fuelled by increasing expectations of Republican presidential nominee Donald Trump’s potential return to the White House. On Tuesday, Bitcoin was trading at around $66,884.
The CSOP inverse Bitcoin product aims to provide returns that closely match the one-time inverse daily performance of the S&P Bitcoin Futures Index. This follows CSOP’s successful launch of Asia’s first Bitcoin futures ETF in Hong Kong in 2022. Initially, the market value of the ETF soared to over $100 million amid a global crypto price rally earlier this year but had decreased to approximately $58 million by Friday.
This new ETF is expected to attract investors looking to hedge against Bitcoin’s notorious volatility and potentially profit from its price drops, further diversifying the financial products available in Hong Kong’s robust market.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
