Bitcoin
Ultra-rich get exclusive access to new ETF
Thailand has taken its first steps into the world of Bitcoin with the launch of a unique exchange-traded fund (ETF) aimed at high-net-worth individuals and institutions. This comes amid a global surge in interest in cryptocurrencies, but with Thai regulators taking a cautious approach, prioritizing security and controlled access for beginners.
Limited access for a privileged few
The Securities and Exchange Commission (SEC) gave its approval to the ONE Bitcoin ETF Fund of uncovered funds offered by One Asset Management (ONEAM), Thailand-based daily Bangkok Post reported on Tuesday. Unlike traditional ETFs accessible to the general public, this one presents a strong barrier to entry.
Only accredited investors, a category that covers institutions and wealthy individuals, can participate. This restricted access reflects a common theme in Asia, where regulators are taking a measured approach to Bitcoin. While China has cracked down heavily, other countries such as South Korea and Japan have implemented stricter know-your-customer (KYC) regulations and listing requirements for cryptocurrency exchanges.
Security First: Bitcoin Wrapped in a Security Net
The ONEAM ETF offers a variation on the typical investment model. Rather than directly holding major cryptocurrencies, the fund invests in a basket of 11 well-established global Bitcoin funds. This “fund of funds” structure aims to mitigate risks associated with individual trading platforms, which have faced issues such as data breaches and digital asset theft in the past.
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Additionally, the ETF emphasizes safe storage practices, employing international standards and custodians used by institutional investors. These custodians store Bitcoin offline, significantly reducing vulnerability to online attacks.
A game of diversification
For accredited investors, Bitcoin’s allure lies in its potential to diversify their portfolios. Currency price movements tend to have a low correlation with traditional assets like stocks and bonds. This means that including a small BTC allocation can help reduce overall portfolio volatility.
Despite its potential benefits, the SEC recognizes the risks inherent in investing in crypto. The history of Bitcoin is marked by high volatility, with significant price fluctuations. To manage this risk, ONEAM recommends a cautious approach, suggesting that investors allocate just 5% of their portfolio to Bitcoin.
A measured step forward for Thailand
Thailand’s incursion into Bitcoin ETFs represents a calculated movement by regulators. Recognizes the growing interest in cryptocurrencies, but prioritizes protecting less sophisticated investors. Limited access and a focus on secure storage reflect this cautious approach.
This contrasts with some other Asian markets, such as Hong Kong, which recently approved ETFs that invest directly in Bitcoin and Ethereum, potentially opening the doors to a wider range of investors.
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