First Bitcoin ETF Approved by Thailand's SEC

Sentiment Status: Positive

Thailand’s approval of its first Bitcoin ETF follows a global trend of increasing acceptance and regulation of cryptocurrency investment vehicles.

Thailand is stepping into the spotlight of the cryptocurrency world with the approval of its first Bitcoin exchange-traded fund (ETF). The Thai Securities and Exchange Commission (SEC) has approved One Asset Management (ONEAM) to launch the ONE Bitcoin ETF Fund of Funds Unhedged.

Understanding the Bitcoin ETF

ONEAM's newly approved ETF, named the ONE Bitcoin ETF Fund of Funds Unhedged, is set to be distributed between May 31 and June 6. This fund is specifically designed for affluent and institutional investors, offering them a new way to diversify their investment portfolios with digital assets. The ETF comes with a high-risk investment level of eight due to Bitcoin's volatile nature.

Pote Harinasuta, CEO of ONEAM, highlighted the strategic benefits of including digital assets in investment portfolios. He stated, "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 also pointed out the limited supply of Bitcoin, capped at 21 million, which combined with growing demand, suggests a strong potential for future growth.

Investment Strategy and Safeguards

To maintain liquidity and safety, the ETF will invest in 11 global funds and adhere to international standards for cryptocurrency storage. Before gaining approval, the ETF was reviewed by regulatory bodies in both the US and Hong Kong to ensure it meets stringent compliance requirements.

ONEAM recommends that investors allocate only about 5% of their portfolios to Bitcoin, anticipating an annual return of around 8.9%. This cautious approach is due to Bitcoin's high volatility, which, while potentially offering significant returns, also carries considerable risk. A portfolio without Bitcoin is expected to yield an annual return of 5.8%.

A Global Trend Towards Cryptocurrency ETFs

Thailand’s approval of its first Bitcoin ETF follows a global trend of increasing acceptance and regulation of cryptocurrency investment vehicles. Earlier this year, Bitcoin ETFs were approved in the United States, setting a precedent that other countries are beginning to follow. Currently, there are eleven Bitcoin ETFs listed on US stock exchanges, and Ethereum ETFs are expected to be approved soon.

The Thai SEC’s decision to allow Bitcoin ETFs came after it amended local rules to permit asset management firms to launch private funds offering these ETFs. However, these offerings are limited to wealthy and institutional investors as part of a careful and measured approach to integrating cryptocurrencies into the financial system.