Hong Kong introduced the first inverse Bitcoin ETF in Asia, designed to profit from declines in Bitcoin’s price. It’s basically a shorting ETF.
The world is upside down
On July 23, Hong Kong revealed the CSOP Bitcoin Future Daily (-1x) Inverse Product.
This new ETF, launched by China Southern Asset Management, provides investors with a way to benefit from drops in Bitcoin’s value, allowing them to short Bitcoin.
This follows the success of CSOP’s Bitcoin Futures ETF, launched in December 2022.
Up? Profit. Down? Profit.
The CSOP Bitcoin Futures Daily Inverse Product is closely matching the inverse daily performance of the S&P Bitcoin Futures Index.
It’s a pretty complex construction, as it achieves this by using a futures-based replication strategy, investing directly in spot-month Chicago Mercantile Exchange Bitcoin Futures.
According to a CSOP company announcement earlier this week, the product will be listed on the Hong Kong Stock Exchange, on the HKEX with a starting price of about 7.8 Hong Kong dollars per unit.
Crypto is popular
Since late 2022, HKEX allowed spot crypto ETFs’ trading. CSOP introduced its Bitcoin Futures ETF and Ether Futures ETF, which track cash-settled contracts of Bitcoin and Ether futures traded on the CME.
Shortly after this, in January 2023, Samsung Asset Management Hong Kong also followed suit with its own Bitcoin futures ETF.
As of April 29 this year, these three futures products have collectively managed assets worth 1.3 billion HKD, equivalent to around $170 million.
On July 5, the Securities and Futures Commission of Hong Kong issued warnings against seven offshore crypto exchanges for operating illegally.
The SFC identified these exchanges for offering services without proper local licenses and placed them on its alert list of the suspicious virtual asset trading platforms.
