Hong Kong Set to Launch Asia’s First Inverse Bitcoin Exchange-Traded Fund

In a move aimed at capitalizing on the volatile trading of cryptocurrencies, Hong Kong’s CSOP Asset Management is set to launch the CSOP Bitcoin Futures Daily (-1x) Inverse Product on the city’s stock exchange on Tuesday. This marks the debut of Asia’s first inverse Bitcoin exchange-traded fund, which allows investors to bet on a fall in the cryptocurrency.

The ETF is expected to benefit from rising demand and profit from the volatile trading of cryptocurrencies. After the first batch of spot crypto ETFs went public in Hong Kong in April, Bitcoin experienced a bumpy second quarter, losing more than 12 percent. However, Bitcoin has rebounded strongly in the past few weeks, driven by increased expectations that Republican presidential nominee Donald Trump would regain the White House. As of Monday, Bitcoin traded at around $67,400 (approximately Rs. 56.3 lakh).

The CEO of CSOP Asset Management, Ding Chen, stated that the first futures-based inverse Bitcoin product listed in Hong Kong creates opportunities for investors to gain from downside movements in bitcoin. Bitcoin has been the most erratic among major global assets in the last ten years, with volatility as high as 38.3 percent in 2023, surpassing crude oil and the Nasdaq 100.

CSOP’s inverse Bitcoin product aims to provide a return that closely matches the one-time inverse daily performance of the S&P Bitcoin Futures Index. The company launched Asia’s first Bitcoin futures ETF in Hong Kong in 2022, which saw its market value grow to over $100 million (approximately Rs. 836 crore) due to the global crypto price rally earlier this year. However, the market value had dropped to around $58 million (approximately Rs. 485.2 crore) as of Friday.

The launch of this new ETF is expected to attract more investors to the cryptocurrency market, providing them with an opportunity to profit from the fluctuations in Bitcoin’s value.