Thailand recently made its mark in the world of Bitcoin by launching the ONE Bitcoin ETF Fund of Funds Unhedged, catering to high net-worth individuals and institutions. The country’s regulators, including the Securities and Exchange Commission, have taken a careful approach to cryptocurrency, prioritizing security and controlled access to beginners. The limited access to this ETF is only open to accredited investors, reflecting a common trend in Asia where regulators are cautious about Bitcoin. While countries like South Korea and Japan have implemented stricter regulations for crypto exchanges, China has cracked down heavily on cryptocurrencies.
Unlike traditional ETFs, the ONEAM ETF invests in a basket of 11 well-established global Bitcoin funds rather than directly holding the cryptocurrency. This “fund-of-funds” structure aims to reduce risks associated with individual trading platforms that have faced issues like data breaches in the past. Emphasizing secure storage practices, the ETF employs international standards and custodians used by institutional investors to store Bitcoin offline, minimizing vulnerability to online attacks.
One of the key reasons accredited investors are drawn to Bitcoin is its potential to diversify their portfolios. The cryptocurrency’s price movements tend to have a low correlation with traditional assets like stocks and bonds, which can help reduce overall portfolio volatility. However, the SEC acknowledges the risks associated with investing in Bitcoin due to its history of high volatility and significant price swings. To manage this risk, ONEAM recommends investors allocate only 5% of their portfolio to Bitcoin.
Thailand’s cautious entry into Bitcoin ETFs highlights the country’s acknowledgment of the increasing interest in cryptocurrency while prioritizing the protection of less sophisticated investors. The limited access and focus on secure storage reflect this measured approach, which is in contrast to some other Asian markets like Hong Kong. Hong Kong recently approved ETFs that directly invest in both Bitcoin and Ethereum, potentially opening the doors to a wider range of investors.
Overall, Thailand’s introduction of the ONE Bitcoin ETF Fund of Funds Unhedged signifies a significant step towards embracing Bitcoin in the country. With a focus on security and controlled access, the ETF offers accredited investors the opportunity to diversify their portfolios with the cryptocurrency while mitigating risks associated with individual trading platforms. As interest in Bitcoin continues to grow globally, Thailand’s cautious approach sets a precedent for other countries looking to navigate the world of cryptocurrencies.
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