Hong Kong Launches Asia’s First Inverse Bitcoin ETF: Report

• Hong Kong launches Asia’s first Bitcoin futures inverse ETF, CSOP Bitcoin Future Daily (-1x) Inverse Product (7376.HK).
• The ETF profits from Bitcoin price declines by taking short positions on CME Bitcoin futures contracts.
• Trading starts on HKEX on July 22, with an initial price of 7.8 HKD per unit.

Hong Kong is set to make history with the launch of Asia’s first Bitcoin futures inverse product, the CSOP Bitcoin Future Daily (-1x) Inverse Product (7376.HK). This new financial instrument, managed by CSOP Asset Management Ltd., will allow investors to profit from declines in Bitcoin prices.

A New Way to Bet Against Bitcoin

The CSOP Bitcoin Future Daily (-1x) Inverse Product offers returns based on the inverse performance of the S&P Bitcoin Futures Index. This means that if Bitcoin’s price falls, the ETF’s value will rise, and vice versa. It achieves this by taking short positions on Bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME). This ETF is denominated in US dollars and begins trading on the Hong Kong Stock Exchange (HKEX) on 22nd July with an initial listing price of approximately 7.8 Hong Kong dollars per unit.

Hong Kong’s Strategic Move

Hong Kong has been proactive in creating a regulatory environment conducive to crypto innovation. The launch of this inverse Bitcoin ETF is part of Hong Kong’s broader strategy to establish itself as a leading crypto-friendly financial hub. In recent years, Hong Kong has introduced several cryptocurrency-related financial products and regulatory frameworks. This latest addition follows the introduction of six spot Bitcoin and Ether ETFs earlier this year, which, despite a lukewarm reception, represent significant steps in diversifying Hong Kong’s financial offerings.

Market Context and Expectations

Bitcoin investors have experienced a volatile summer, with prices dropping below $54,000 in early July before rebounding to $67,234 as of yesterday, driven by political developments in the United States. CSOP Asset Management’s CEO, Ding Chen, highlighted that the new inverse ETF could attract significant interest from investors in Japan, Korea, and Singapore. The firm aims to gather between $50 million and $100 million in assets over the next couple of years, with a management fee of 1.99%.